GDP UPDATE
March 2007
McIlvaine Company
INDUSTRY ANALYSIS
1. AMERICAS
U.S.
The economy turned in a much weaker performance in the final quarter of 2006 than initially thought, and new-home sales tumbled in January by the most in 13 years, suggesting more business lethargy ahead. The latest batch of economic reports from the Commerce Department pointed to a temporary economic listlessness rather than signaling the economy would slip into recession, economists said.
Ken Mayland, president of ClearView Economics, called it a "midcourse breather."
The department's new reading on the gross domestic product showed the economy grew at a 2.2 percent pace — a considerably weaker rate than first estimated. It initially had reported the expansion in the last three months of 2006 to be at a 3.5 percent pace.
The principal reason for the new, significantly lower estimate: Businesses tightened their belts amid fallout from the troubled housing and automotive sectors.
Federal Reserve Chairman Ben Bernanke said he wasn't worried about the GDP's downward revision, saying the new reading "is actually more consistent with our overall view of the economy than were the original numbers."
The fresh look at the housing market was sobering. New-home sales plummeted by 16.6 percent in January from the previous month. That was the largest decline since January 1994, when sales slid by 23.8 percent. The decline in January — much steeper than analysts anticipated — left sales at a seasonally adjusted annual rate of 937,000, the lowest level since February 2003.
Analysts predict the economy will stay sluggish for a while, reflecting continued strain from the housing sector. The economy should clock in at a 2.5 percent pace in the current January-to-March quarter and edge up to a 2.6 percent pace in the April-to-June period, according to projections by the National Association for Business Economics.
BRAZIL
1.) Brazilian President Luiz Inacio Lula da Silva said that economic growth in 2006 did not meet the country's demands, although it did outpace expectations. The president said that a 2.9 percent gross domestic product (GDP) rise registered last year was a bigger figure than that foreseen by analysts, who estimated a 2.7 percent growth in 2006. However, Lula admitted that it was lower than that he and Brazil wished for.
President Lula said that the country's economy is currently well organized. Otherwise Brazilians would be talking about a US$15.9-billion debt, which Brazil once owed to the International Monetary Fund (IMF).
Minister of Planning Paulo Bernardo also admitted that those growth rates did not satisfy what the government hoped for. But he described the latest results as very good, noting that the GDP registered in the fourth quarter of 2006 was 1.1 percent higher than that registered in the third quarter, and up 3.8 percent compared with the same period in 2005.
2.) The Brazilian economy grew 2.9 percent in 2006, or 0.06 percentage points more than in 2005, Brazil’s Geographical and Statistics Institute (IBGE) said Wednesday in Brasilia.
The growth of Brazil's Gross Domestic Product (GDP) in 2006 was half of overall world economic growth, which was 5.1 percent, according to International Monetary Fund (IMF) estimates.
Of the BRIC (Brazil, Russia, India and China), Brazil was placed last in terms of economic growth, with China in first place with 10.7 percent growth, followed by India with estimated growth of 9.2 percent and Russia with 6.7 percent. The IBGE said that the services sector saw growth of 2.4 percent, industry of 3 percent and farming of 3.2 percent.
Public spending rose 2.1 percent and private spending rose 3.8 percent.
CANADA
Statistics Canada says the country's economy strengthened at the end of 2006 with gross domestic product rising 0.4 percent in December, meeting economists' expectations.
The economy also grew at an annualized rate of 1.4 percent in the fourth quarter, slightly above economists' forecasts. Growth in the U.S. economy edged up to 2.2 percent in the same period.
The agency said that the pace of economic activity eased slightly in the final quarter while GDP – total goods and services produced in Canada – advanced 2.7 percent over the full year. Growth in December was largely driven by higher personal expenditure and the strengthening of exports. Both the service and the goods-producing industries increased, with manufacturing, wholesale and retail trade posting the strongest results.
PERU
Peru's gross domestic product grew 8 percent compared with a year earlier, fueled by soaring domestic demand and investment, the government's statistics agency said. The growth rate was in line with a 7.9 percent figure estimate forecast previously by the Economy Ministry.
Fueling fourth-quarter growth was domestic demand which grew by 12.4 percent against a year earlier, the National Statistics Institute (INEI) said.
Gross capital fixed investment rose by 19.9 percent compared with the same quarter in 2005, it added. The INEI statement gave no comparative growth figures for the third quarter.
The INEI, on Feb. 15, 2007, said the GDP grew 8.03 percent in 2006, the fastest annual growth rate in 11 years. It also then reported that the GDP grew 8.9 percent in December compared with December 2005, beating analysts' forecasts.
Monthly GDP figures are closely watched by analysts, drawing more market attention than quarterly GDP growth data. The latter is issued weeks after data is made available for the final month of each quarter. Peru's economy has grown above 5 percent for the last five years, its highest average rate for a five-year period since the early 1970s.
Peru's economy has now seen eight years of consecutive growth, helped by its mining industry, buoyed by high world prices for metals. The government has estimated economic growth of between 6 percent and 7 percent for 2007.
VENEZUELA
Venezuela’s January unemployment rate dropped to its lowest level, 11.1 percent, in over eight years, according to the country’s National Statistics Institute. Also, GDP growth for the 4th quarter of 2006 was higher than expected, at 11.8 percent.
The January 2007 unemployment rate, explained Statistics Institute President Elias Eljuri, was 5.5 percentage points lower than when Chavez came into office in 1999 and 1.8 points lower than in 2006.
According to Eljuri, this rate is doubly positive because it also reflects a higher than usual rate of formal employment, which increased by 2.5 points, from 54.0 percent to 56.5 percent. This means, though, that 43.5 percent of the workforce is still employed in the informal labor market.
Last week the Venezuelan Central Bank released the country’s economic growth data, which showed that the Venezuelan economy was still growing steadily, despite lower oil prices in the second half of 2006. At 11.8 percent GDP growth for the 4th quarter of 2006, this was the 13th consecutive quarter of growth since the 4th quarter of 2003. Venezuela’s economy has grown by over 10 percent every year since 2004.
The total growth for all of 2006 was 10.3 percent, which is about what had been predicted at the end of the year. Altogether Venezuela’s economy has grown by 22 percent since Chavez came into office in 1999. The years 2002 and 2003 the economy shrunk significantly due to the coup attempt and the shutdown of the country’s all-important oil industry.
The sectors that experienced the greatest growth in all of 2006 were financial institutions (39.2 percent), construction (32.1 percent), communications (23.2 percent), and commerce (19.9 percent). Government services grew far less, at only 3.8 percent. The only sector to shrink slightly during 2006 was the oil sector, which declined by 1.9 percent, presumably due to the lower price of oil relative to 2005.
2. ASIA
AUSTRALIA
Reforms to increase Australia's workforce participation could lift Australia's long-term GDP by 6 percent, or $60 billion a year in today's money, the Productivity Commission estimates. In a report to the Council of Australian Governments (COAG) on the potential benefits of its reform agenda, the commission estimates that the reforms could make a huge impact over the long term.
While emphasizing that these are "outer envelope" estimates as to what is possible, and should not be added together, it says:
· Increased work incentives and training of potential workers could lift the workforce by 8.4 percent by 2030, adding more than 1 million workers, and raising GDP by 6 percent.
· More emphasis on preventing disease and injury, along with more education and skills, could lift productivity by 3 percent.
· Reforming state and federal regulation to reduce compliance costs could save business $8 billion a year, and lead to efficiency gains with even bigger benefits.
· Reforming regulation and funding of road and rail transport, electricity, gas and ports to increase competition could lift Australia's output by up to 0.5 percent, particularly if investment is increased.
· Raising productivity in the health sector by 5 percentwould raise GDP by 0.4 percent.
The report came out shortly after Federal Treasurer Peter Costello announced that the commission will carry out annual reviews of state and federal regulation of business to pinpoint potential savings.
The commission strongly endorsed public investment in infrastructure, saying overseas studies suggest that a 1 percent increase in spending on public infrastructure could lower service prices by 4.5 percent.
CHINA
According to the National Bureau of Statistics:
1. GDP up 10.7 percent.
Preliminary calculations show that China's gross domestic product (GDP) hit 20,940.7 billion yuan in 2006, up 10.7 percent over the previous year. At the end of last year, the total number of employed was 764 million, 5.75 million more than the end of 2005. National tax revenue stood at 3,763.6 billion yuan (excluding tariffs, farmland use tax and deed tax), an increase of 21.9 percent.
2. Grain output up 2.8 percent.
In 2006 China recorded a grain output of 497.46 million tons, rising 2.8 percent. This is the first time that China's grain output has grown in three consecutive years since 1985, experts say, but it is still viewed as recovery growth considering that the basis for continuous growth is not particularly solid and supply generally falls short of demand.
Therefore, in this year's "No. 1 document", the CPC Central Committee insisted the nation work towards grain self-sufficiency, and proposed the gradual building-up of a grain security system in which supply is stable and operation is well coordinated, efficient and ongoing. For stable grain production, the state will continue its low-price grain purchase policy for key areas and strains.
3. Per capita net income of farmers up 7.4 percent.
In 2006, the per capita net income of farmers was 3,587 yuan, rising 7.4 percent in real terms; the per capita disposable income of urban residents was 11,759 yuan, rising 10.4 percent in real terms. The Engel coefficient for rural households was 43 percent, and that for urban households was 35.8 percent.
At the end of last year, there were still 21.48 million people living below the poverty line in rural areas (earnings less than 693 yuan), 2.17 million less than at the end of 2005.
4. Total import/export volume up 23.8 percent.
In 2006 China recorded an import/export trade value of US$1,760.7, up 23.8 percent from the previous year. There were 41,485 new enterprises established with foreign direct investment, down 5.8 percent; and US$69.47 billion was actually used in foreign direct investment, down 4.1 percent.
5. Foreign exchange reserves topped US$1 trillion
The country's foreign exchange reserves hit US$1,066.3 at the 2006 yearend, US$247.5 billion more than the previous year. The exchange rate stood at US$1 to 7.8087 RMB, 3.35 percent higher than at the end of 2005.
6. Energy consumption per unit of GDP dropped 1.23 percent.
Preliminary statistics show a total energy consumption of 2.46 billion tons of coal equivalent, up 9.3 percent. Energy consumption per 10,000 yuan of GDP was equivalent to 1.21 tons of coal, down 1.23 percent, the first decrease since 2003.
While energy consumption per unit of GDP increased 0.8 percent in the first half of last year, it began to decrease in the third quarter, securing a favorable situation for the whole year, This favorable turn was the result of China's energy-saving efforts, but a more arduous task remains as the nation failed to reach the target of 4 percent set at the year's beginning.
The total discharge of major pollutants rose. The figure for chemical oxygen demand (COD) stood at 14.31 million tons, rising 1.2 percent; that for sulfur dioxide was 25.94 million tons, rising 1.8 percent.
7. Funds for research and development equivalent to 1.41 percent of GDP
Last year China spent 294.3 billion yuan on research and development, 20.1 percent more than the previous year and 1.41 percent of GDP. Though a record high, it lags behind the standard (above 2 percent) of developed countries.
Last year, a total of 1,409 projects under the National Key Technology Research and Development Program and 2,841 projects under the Hi-tech Research and Development Program (the 863 Program) were implemented, according to the communique. The year 2006 saw the establishment of seven new national engineering research centers and three national engineering laboratories, and funds allocated for fundamental research programs reached 14.8 billion yuan.
A total of 268,000 patents were approved in 2006, of which 224,000 were domestic patents, accounting for 83.5 percent of the total. A total of 58,000 patents for new inventions were given, of which 25,000 were domestic, accounting for 43.4 percent.
At the end of 2006, China's urban residents accounted for 43.9 percent of the national population, 0.9 percent higher than the previous year. The nation had a total population of 1,314.48 million, 6.92 million more than the previous year. The urban population stood at 577.06 million and the rural population at 737.42 million. Statistics indicate an annual urbanization growth rate of around 1 percent. The urbanization rates from 2002 to 2005 were 39.1, 40.5, 41.8 and 43 percent respectively.
9. Newly completed commercial buildings dropped 0.6 percent.
The total floor space created in new commercial real estate decreased by 0.6 percent, as against a 1.49 percent rise in 2005. The total sales of commercial buildings reached 2,051.0 billion yuan. Of this, purchases made from the plans totaled 1,436.6 billion yuan, accounting for 70 percent. The proportion was 64.5 in 2005.
In 2006, investment in real estate development was 1,938.2 billion yuan, up 21.8 percent. Of this total, investment in commercial real estate was 1,361.2 billion yuan, an increase of 25.3 percent.
10. Privately-owned cars topped 10 million.
At the end of 2006, the number of privately-owned cars numbered 11.49 million, up by 33.5 percent. The increase in private car ownership began in the 1980s when it was first allowed. The number soared this century as a result of the overall opening up of China's automobile market, the fast development of domestic carmakers (which increased supply and brought down prices), as well as a series of national policies encouraging private buyers to purchase a car.
HONG KONG
The government expects gross domestic product (GDP) growth of 4.5-5.5 percent this year, Financial Secretary Henry Tang said.
'We anticipate that Hong Kong's economy will continue to record solid growth in 2007. We forecast GDP to increase by 4.5 to 5.5 percent, higher than the average trend growth rate for the past ten years,' Tang said in his annual budget speech.
He added that he is optimistic about Hong Kong's economic outlook over the medium term.
'Hong Kong will continue to move up the value chain in services provision, and further consolidate its role as the financial, trade and logistics centre for the region,' he said
'Our economic integration with the Mainland will also achieve appreciable synergies,' he added.
Tang forecast consumer price index (CPI) to rise 1.5 percent this year.
'The continuous upgrading of productivity has seen our economy achieving strong growth whilst keeping our inflation rate at the relatively low level of 2 percent during 2006,' he said.
A reduction in public housing rentals, the implementation of a Pre-Primary Education Voucher Scheme and measures proposed in the budget will help ease the inflation rate in 2007 to 1.5 percent, he said.
'The underlying trend is for a further mild increase in 2007, with the inflation rate forecast to average 3.5 percent over the following four years.'
'Moderate inflation is generally regarded by economists as a healthy sign in an economy, and should not be a cause for concern,' Tang said.
He said the government will keep a close watch on the inflation trend.
INDIA
Finance Minister P Chidambaram recently said that he expected another year of high GDP growth in 2007-08, with the economy likely to grow by about 9 percent. The GDP growth for 2006-07 has been pegged at 9.2 percent.
After presenting his annual budget proposals for 2007-08, he told a business delegation that India's growth story was intact. "I look forward to another year of high growth," he said. The finance minister has also urged industry to hold prices down and help fight inflation. "I will urge industry to hold the price line in the fight against inflation." He said that inflation could be moderated through duty cuts and monetary steps.
.3. EUROPE / AFRICA / MIDDLE EAST
AUSTRIA
Economics and Labor Minister Martin Bartenstein said that he expects Austria's unemployment rate to decline further as a result of the country's continuing GDP growth. Bartenstein said the goal is to lower the unemployment rate to below 4 percent by 2010 -- a rate synonymous with full employment.
Austrian unemployment decreased to 4.4 percent in February from 4.5 percent in January, according to the latest estimates prepared by the Federal Ministry of Economics and Labor.
The Austrian Institute of Economic Research said that the Austrian economy is set to grow an average 2.5 percent a year between 2007 and 2011.
AZERBAIJAN
Under the National Bank forecast, by 2010 GDP will double. During a meeting of the Caspian Integration Business Club members, NB board chair Elman Rustamov said that GDP per capita will reach $5,000.
This year GDP growth is expected to be 35 percent. That, first of all, is linked with growth in oil sector (65 percent) and non-oil sector (12 percent).
FINLAND
Finland's gross domestic product grew 5.5 percent in 2006 — the highest rate since 1997 — amounting to €168 billion (US$222 billion), the government statistics agency said.
The rate of growth was fastest in exports, which grew almost 11 percent over the previous year, Statistics Finland said. Imports were up 5 percent. General expenditure grew by 2.3 percent in 2006, and households spent 5 percent more than a year earlier, the agency said, adding that they were driven deeper into debt.
Wages increased by 4.4 percent, but households' "regular income could not quite cover their consumption expenditure," Statistics Finland said. "Household's indebtedness increased again (in 2006) ... and was higher than ever before."
But, government income was up — with a surplus of €1.6 billion (US$2.1 billion) — and tax revenues grew by 3.6 percent on 2005.
GREECE
Greece's fourth-quarter GDP growth came in at 4.3 percent year-on-year on the back of robust final demand of 5.2 percent, which is down from the third quarter growth figure of 4.4 percent, the National Statistical Service of Greece said.
Final demand consists of the sum of personal expenditure, investment, government spending and the trade balance. The NSS added that final consumption was up 2.8 percent in the fourth quarter year-on-year, and investments jumped 10.6 percent. Fourth quarter exports were up 7.9 percent year-on-year and imports were up 8.9 percent.
ITALY
Italy's GDP, before being adjusted for the number of working days, rose 1.9 percent year-on-year in 2006 compared with a 0.1 percent rise in 2005, according to the statistics office ISTAT. ISTAT added that the public deficit totaled 4.4 percent of GDP compared with 4.1 percent a year earlier.
On Feb 13, ISTAT released preliminary GDP data, adjusted to the number of working days, that showed that 2006 GDP rose 2.9 percent.
In late January economy minister Tommaso Padoa-Schioppa said he saw 2006 GDP at 1.7-1.8 percent while the deficit/GDP ratio was seen around 4.8 percent.
'The 2006 public accounts benefited from an economic recovery that was better than forecast,' and tax revenues that make it possible to expect 'a structural improvement in fiscal discipline,' Padoa-Schioppa said. He warned that while the overall economic climate has improved, Italy 'cannot abandon the discipline needed to gradually eliminate the deficit and to reduce public debt.'
LATVIA
Average gross monthly wages in Latvia grew by a colossal 23.0 percent in 2006, the highest figure in the last ten years, the Latvian statistics bureau announced. The news is likely to stoke fears of overheating in Latvia, which is already breaking records with its double-digit gross domestic product (GDP) growth and stubbornly high inflation.
Latvian wages have long been among the EU's lowest. In 2006, average gross private-sector monthly wages rose from 224 lats (318.72 euro) to 277 lats - barely a tenth of the EU average, 3140 euro, in 2005 (the last year for which full figures are known). But economists have warned that the rapid wage rises, combined with easy access to credit, have overstimulated the economy.
Latvia's inflation has been above 6 percent since EU accession in 2004, while in the third quarter of 2006 its current-account deficit hit 24.2 percent of GDP.
And the fact that some of the highest wage rises were recorded in export-driven sectors such as manufacturing (22.7 percent) and production (28.9 percent), threatening export competitiveness, is likely to stoke fears of a growing economic imbalance.
In the last few weeks, influential observers such as the Standard and Poor's rating agency and Danish bank Danske have warned of serious dangers in Latvia's unchecked economic growth. Despite the fears, however, the small Baltic state is set to post record GDP figures next week, with a growth rate of 11 to 12 percent expected.
RUSSIA
Russia's GDP will be growing by 7 percent a year, Russia's Economy Minister German Gref told journalists. Once this growth rate is attained, GDP may be doubled within a ten-year period. The minister stressed that GDP couldn't be obviously doubled by 2010, despite the general upward trend in the economy.
According to Gref, at the moment the government's major task is to maintain GDP growth at 6.5 percent a year, which will give an opportunity to resolve numerous economic issues. The key issue from this perspective, Gref believes, is the scientific development, which needs to be restored to an adequate level.
SOUTH AFRICA
Moody's Economy. com says that while it expects South Africa's economy to perform well in 2007, it doesn't believe it will match the 5 percent plus expansion witnessed in recent years. It says GDP growth is likely to moderate as consumer spending and credit demand slows in the wake of policy tightening.
Africa's largest economy shot up 5.6 percent on a seasonally adjusted and annualized basis in the fourth quarter, from a revised 4.5 percent (previously 4.7 percent) in the third stanza.
"Growth continues to be led by strong domestic demand, with consumer spending, manufacturing, construction and infrastructure spending remaining strong despite the higher interest rate environment in the closing months of the year."
The impressive fourth quarter growth print has pushed the preliminary growth rate for 2006 to 5 percent, just shy of the 5.1 percent growth booked in 2005, which was in turn a 21-year high.
SWEDEN
Sweden's calendar-adjusted GDP rose by 4.7 percent during the fourth quarter 2006 compared to a year earlier, Statistics Sweden reported. Compared to the third quarter 2006, the seasonally adjusted GDP grew by 1.2 percent.
Household consumption and gross fixed capital formation gave the highest contributions to GDP growth, Statistics Sweden said. Gross fixed capital was up 8.6 percent, while household consumption expenditures increased 2.7 percent.
Exports increased 9.3 percent and exports 8.2 percent.
Total employment, measured as the number of hours worked, was up 2.5 percent.
Compared to the publication in Dec 2006, the growth in GDP, calendar-adjusted, has been revised upwards by 0.1 percentage points for the second quarter and revised downwards by 0.3 percentage points the third quarter of 2006.
UKRAINE
The Ukrainian State Statistics Committee has revised its GDP growth estimate for 2006 from 7 percent to 7.1 percent. Nominal GDP amounted to UAH 535.86 billion in 2006, the State Statistics Committee told Interfax-Ukraine.
The committee said, however, that these are not final figures and that they may be revised. Nominal GDP grew by 26.2 percent in 2006 with the December-on-December inflation being 11.6 percent and the average annual inflation rate being 9.1 percent.
UNITED ARAB EMIRATES
UAE’s nominal GDP grew by 25.6 percent in 2005, according to the Central Bank of UAE estimates. Real GDP grew by 8.2 percent on the back of strong economic activity, high oil prices, and large fiscal and external surpluses. This is the third consecutive year of oil price-led high growth in the country, as in the case of the other GCC countries.
Tremendous growth in the last couple of years has boosted the per capita GDP to an all time high of US$28,147 in 2005 as compared with US$24,380 the year before. Within GCC countries, UAE had the second highest per capita GDP after Qatar.
Oil and gas, which contributed 35.7 percent of the economy in 2005, had a phenomenal growth of 40.5 percent, on the back of a 33.8 percent growth recorded in the previous year. Similarly, non-oil sector in the UAE continued its steady growth, growing by 18.6 percent in ’05 to represent 64.3 percent of GDP. Among the various sub-segments within the non-oil sector, the highest growth was recorded by the manufacturing sector. The segment grew by a robust 22 percent in 2005, to represent 12.6 percent of GDP.
Manufacturing sector is considered a pioneer sector due to the importance of activities that it comprised as industrial production of fertilizers, oil and petrochemical industrial products and gas liquefaction, food industries, aluminum, building material industries, cement and pharmaceutical products.
More important, was the ‘Real Estate and Business Services’ that constituted at 7.4 percent of GDP and grew by 19.7 percent in 2005. This sector was buoyed by the increasing investment in infrastructure, due to the country being positioned as an attractive tourist destination in addition to the increase in the residential and non-residential units.
Generally, UAE’s economy is still characterized by the sheer size of consumption expenditure that continued to account for the highest share of GDP during 2005. Consumption expenditure stood at AED268.3bn in 2005 and grew by 8.3 percent over 2004. Private consumption expenditure stood at 44.1 percent of GDP and grew by 7.7 percent in 2005.
On the investment expenditure front, the year 2005 witnessed major changes as government investment encountered its first trough since 2002 declining by 14.8 percent. On the contrary, public sector investment accounted for this decline as it continued to be robust growing by another 26.6 percent. Compensating for the lower growth of government investment, private investment grew rapidly by 49.1 percent that is very high considering that it came on top of 8.9 percent growth last year.
Private sector, especially technology-based companies supplying to government institutions, have been aided to a large extent by the heavy public spending. However, on an absolute level, there has been an increase in capital formation, which is critical to the long-term growth of the economy. Total investments expenditure stood at AED103.6bn in 2005 up from AED81.3bn during 2004, reporting 27.5 percent growth. Net exports almost doubled to stand at a new landmark of AED113bn in 2005 up from AED56.9bn in 2004. Exports, boosted by high oil prices grew by 26.9 percent, and a consequent increase in disposable income and higher private consumption resulted in imports growing at a rate of 12.2 percent.
Looking forward, we expect economic growth to remain buoyant for both 2006 and 2007. According to Abu Dhabi Chamber of Commerce, GDP is estimated to grow by 14 percent for 2006 to reach AED553.4bn while in real terms the economy is estimated to score 9.7 percent growth rate. Both oil and non-oil sectors are to continue picking up for the medium term. Supporting these expectations are the large-scale real estate and infrastructure projects to commence in the next period toward 2010 whether in Dubai or Abu Dhabi that are already in the pipeline as a part of each emirate’s economic diversification strategy.
As for the oil sector, prices are expected to remain high and plans to expand capacity in the oil sector will result in higher production. On the other hand, non-oil sector will gain more support from the diversification strategy. We expect manufacturing and trade to continue growing at high rates, in turn keeping the overall economic growth steady. Spending in capital-intensive industries, especially petrochemicals and gas would prop up the economy in the longer term. Finally, both the current account and overall fiscal surpluses are expected to remain buoyant.
McIlvaine Company,
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