Monday, June 25 2018 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Updated: 6 hours 10 min ago
Public administrations met the 2017 stability target, thanks to the economic recovery and contained public expenditure. In 2018, in a favorable economic environment, the recent performance of public accounts suggests a more expansive path in fiscal policy. In this context, the announced measures could make it difficult to achieve the stability objectives for 2018 and 2019.
In 2017 the real estate sector grew for the fourth year in a row, posting most dynamism in regions that had not led the recovery, partly thanks to the healthy demand for secondary residences. In 2018 the sector will continue to evolve unevenly among regions and will show more moderate growth rates, as indicated by the first data available for the year.
Uruguay: growth slows, but investment expected to pick up. Downward revision of growth in Uruguay due to the effect of the drought on the agricultural and livestock sector and hydroelectric generation. Private consumption slows due to slacker pace of increase in real wages.
The World Bank updated the “Global Financial Inclusion” (Global Findex) database. Housing construction projects could recover in the first half of 2018. Domestic assets in step with NAFTA negotiations. Adjustments regarding external auditing.
The process of China’s financial liberalization ground to a halt in 2015-2017 after experiencing a cluster of episodes of financial turmoil. After a few years of adjustment, the authorities now seem to be ready to press ahead with their agenda of financial liberalization again. Moreover, the authorities’ renewed interest in financial liberalization is broad-based.
The Industrial production (IP) grew by 7.6% yoy in calendar adjusted terms (Consensus: 7.2% vs. BBVA Research: 6.5%) in March. The average IP growth rate reached 9.8% in 1Q, moderating from 10.7% in 4Q17. Our monthly GDP indicator (GBTRGDPY Index at Bloomberg) nowcasts 6.4% yoy growth in 1Q (96% of information). We maintain our 2018 GDP growth estimate at 4%.
The European Commission has presented an Action Plan to promote innovation in the financial sector, setting the roadmap for fintech in Europe. Most initiatives are positive for the EU financial market, but more ambition is needed if Europe aims to become a global fintech hub.
April economic indicators announced today point to an expected moderation in growth. In particular, fixed asset investment and retail sales both dropped from the previous readings, although industrial production maintained its momentum. This suggests that growth headwinds remain in place, mainly from domestic tightening policy initiatives and trade skirmishes with the US.
The natural interest rate, or r-star, has been a critical determinant of monetary policy normalization in the U.S. and other countries. With the U.S. Federal Reserve expected to continue raising interest rates, central banks in other countries will have to balance the spillover effects with their own internal dynamics.
The recent proposal of the Spanish government, to tax the income generated in Spain by the major digital companies, is an effort aligned with that of other European Union neighbours to prevent possible evasion and erosion of the tax base. A laudable objective, and one shared by the whole world’s tax authorities.
Highlights: FSB consults on compensation data reporting. ESAs consult on amendments to EMIR. EBA issues statement on the implementation of Basel III and publishes results of CVA risk monitoring exercise. ESMA updates DVC data. CNMV publishes Q&A for fintechs, and suspends certain waivers on pre-trade transparency requirements.
Geopolitical tensions between Iran and US are in the spotlight after President Trump pulled out from Iran nuclear deal. North and South Korea set the geopolitical course towards peace and denuclearization. Several electoral processes are open in Middle East and Latin America, which could increase short-term political uncertainties and social noise in the coming months.
We construct a high-dimensionality Retail Trade Index (RTI) constructed to nowcast the retail trade sector economic performance in Spain using data from BBVA clientS from their credit or debit card transactions at Spanish point of sale terminals. Results indexes are robust when compared with the Spanish RTI, regional RTI, and RTI published by the INE.
The negotiation of the Spanish National Budget has restored the updating of pensions with the inflation for 2018 and 2019 and has delayed the entry into force of the Sustainability Factor (FS from its Spanish initials) until 2023. Although it would be wise to be prudent and wait for the recommendations of the Toledo Pact.