China: PBOC says debt crisis, trade to affect growth
China’s economic growth will be affected by the international sovereign debt crisis and trade frictions, the People’s Bank of China said. The world’s fastest-growing major economy still doesn’t have a “solid” recovery in domestic demand, and has to sustain consumer spending growth, the nation’s central bank said. Governments worldwide exiting stimulus spending will also impact its growth, it said. (Bloomberg)
China: Passing peak in growth insufficient to tame inflation
China’s policy makers may see evidence this week that economic growth peaked in the first quarter, strengthening their opposition to higher interest rates even as inflation accelerates. Consumer prices jumped 3%, hitting the government’s targeted full-year ceiling, after a 2.8% increase in April, according to the median of 32 estimates in a Bloomberg News survey before the 11 June release. In contrast, lending, investment and industrial output figures due this week may show a slower pace of gains, according to survey estimates. (Bloomberg)
Japan: Noda named Japan’s finance minister, tasked with tackling debt
Yoshihiko Noda was named Japanese finance minister, bringing support for spending cuts as Prime Minister Naoto Kan compiles a plan to rein in the world’s biggest public debt. Noda becomes the nation’s ninth finance chief in four years, replacing Kan, who takes office as premier following last week’s resignation of Yukio Hatoyama. (Bloomberg)
Japan : Current-account surplus widens on exports in April.
The gap rose 88% YoY to JPY 1.242tr (USD 13.6), the Ministry of Finance said. (Source: Bloomberg)
S. Korea : Unemployment rate declined to 3.2% last month from 3.7% in April, Statistics Korea said in Gwacheon, citing seasonally adjusted figures. (Source: Bloomberg)
Euro: Rescue fund created to combat debt crisis
European finance ministers put the finishing touches on a rescue fund being backed by 440bn Euros (USD524 bn) in national guarantees, seeking to halt the spread of Greece’s debt crisis. The European Financial Stability Facility would sell bonds backed by the guarantees and use the money it raises to make loans to euro-area nations in need, the finance ministers agreed. The new entity would sell debt only after an aid request is made by a country. (Bloomberg)
Euro : Countries to tighten budgets in 2011, defying U.S.'s pleas.
European governments vowed to raise taxes or cut spending next year, balking at U.S. pleas for looser budget policies to help speed the recovery from the worst recession since World War II. Budgets will remain "neutral" in 2010, becoming "clearly restrictive as of 2011 when recovery is expected to gain momentum," Luxembourg Prime Minister Jean-Claude Juncker told reporters after chairing a meeting of euro-region finance ministers in Luxembourg. (Source: Bloomberg)
U.K : Fitch says Cameron faces 'formidable' debt task.
Prime Minister David Cameron needs to accelerate budget-deficit cuts to protect Britain's top credit rating, Fitch Ratings said. The U.K. is lagging behind other European countries in publishing deficit-reduction plans as investor concerns over government debt loads increase. (Source: Bloomberg)
US: Small-business confidence increased in May
Confidence among US small businesses rose in May to the highest level since September 2008 as executives became more upbeat about the economy six months from now, a private survey found. The National Federation of Independent Business’s optimism index increased to 92.2 last month from 90.6 in April. (Bloomberg)
US: Bernanke says unemployment unlikely to fall quickly
Federal Reserve Chairman Ben S. Bernanke said the US recovery probably won’t quickly bring down the unemployment rate, which is likely to stay “high for a while.”Given the depth of the recession, the recovery is “moderate paced,” Bernanke said, in Washington._While the Fed will raise interest rates from a record low before the economy returns to “full employment,” Bernanke said officials don’t know when that process will start. The banking system isn’t fully healthy and lenders are “cautious” in providing credit, he said. (Bloomberg)
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