Real gross domestic product (GDP) grew 2.6% at an annual rate in the fourth quarter of 2014, according to the advance estimate from the Bureau of Economic Analysis. The report reflects very strong consumption growth, continued increases in residential investment, weaker business investment after two quarters of strong growth, an unusually large decline in federal spending that reversed last quarter’s above-trend increase, and stronger imports, which while subtracting from GDP, partly reflect improved consumer sentiment. Overall, real GDP rose 2.5% versus the fourth quarter of 2013. Indeed, this report affirms the underlying pattern of resurgence in the economy.

Brazil

Market forecasts for Brazil's economic growth and inflation worsened for an eighth straight week, according to a central bank survey.

The median forecast of about 100 economists in the weekly central bank survey projected Brazil's economy to shrink 0.5% this year, down from a contraction of 0.42% in the prior week's poll. Annual inflation is set to end 2015 at 7.33%, up from 7.27% in the prior survey.

The central bank targets inflation at 4.5%, with a tolerance margin of two percentage points.

Mexico

Mexico’s statistics institute, Inegi, went ahead and changed the style of its gross domestic product release in reporting fourth-quarter GDP Friday, focusing on seasonally adjusted numbers for both quarterly and year-on-year comparisons.

In fact, Inegi gave its release a fairly robust makeover with user-friendly links to relevant databases, which have always been available but weren’t that easy to navigate for the casual visitor to the site.

Fourth-quarter GDP rose 0.7% from the third quarter, non-annualized. Output was up 2.6% seasonally adjusted from the fourth quarter of 2013, and for the full-year the economy expanded 2.1%, better than 2013’s 1.4% growth.

“This process will be gradually applied to most of the indicators … whose numbers require adjusting for seasonality,” Inegi said.

ASIA

China

As Premier Li Keqiang guides China toward lower growth rates, economists everywhere are grappling with this question: how slow is too slow for the world’s second-biggest economy?

Number-crunchers have traditionally believed that China must grow at least 7 to 8% annually to generate enough jobs and prosperity to keep protesters from flooding Tiananmen Square. But what if China is already operating at a significantly lower rate of output – more like 5% – without a significant uptick in unrest? And what might that mean for Asia’s economic outlook over the next five years?

The consultancy Oxford Economics has created a “Li Index” that tries to estimate Chinese growth by using measures such as electricity output, credit growth and rail freight. Contrary to the official headline GDP number, those data suggest gross domestic product growth has been stumbling along under 5% for a few months now. While some may quibble with the index’s emphasis on heavy industry, the fact is that official Chinese GDP and trade data aren’t a whole lot more reliable.

If Oxford is right, that means there may be a much lower threshold for preserving social stability in China than previously assumed. The consultancy’s explanation, while highly technical, boils down to this: China’s shrinking population and the slowing of migration to cities means there are enough jobs to go around, even as GDP growth also eases. “With population growth slowing, in particular growth in the working-age population, the rate of growth needed to preserve urban employment is likely to slow to around 5% by 2020,” says Oxford’s Clare Howarth.

It’s entirely possible that urban population dynamics – and social stability – over the next several years can be sustained by 4.5% to 5% growth

While the United Nations claims China’s working-age population won’t start shrinking until 2016, econometric analysis suggests otherwise. Between 1979 and 2013, for example, urban employment grew about 3.7% a year relative to GDP growth of about 9.8%. That encouraged the view that high growth rates were needed to generate acceptable levels of employment and maintain stability. As recently as 2013, Li indicated that growth well above 7 per cent remained a critical priority for Beijing.

Now, though, as I noted in an earlier piece, labor scarcity in cities is leading to big wage gains for lower-income workers. China may run out of cheap labor sooner than anticipated; the evidence points to urban population growth approaching only the 2 per cent mark between 2014 and 2020.

At the same time, there’s ample reason to believe China’s GDP is already overstated, as Oxford claims. The ratio of urban employment growth to GDP needed to avert protests may thus also be exaggerated. It’s entirely possible that urban population dynamics – and social stability – over the next several years can be sustained by 4.5% to 5% growth.

This is both bad news and good news for the global economy. Bad news, because a Chinese slowdown will rob the world of another vital growth engine amid already tepid demand. Good news, because Li and President Xi Jinping have more latitude to rebalance the economy. They’ll need to take advantage of that opportunity, though. Already middle-class incomes are stagnating in China. Unless the country can ultimately create better-paying jobs, particularly in the services sector, this period of labor calm won’t last forever.

India

Describing the fundamental tenet of the fundamental tenet of the Narendra Modi-led government as "sabka saath, sabka vikaas" (all together for all-round development) President Pranab Mukherjee said the latest estimates of India's gross domestic product (GDP) growth makes it the fastest growing large economy in the world, where inflation has fallen to a record low.

"According to the latest estimates, our GDP is growing at 7.4%, which makes India the fastest growing large economy in the world," he added.

Earlier this month government statisticians came out with GDP data calculated with a new base year, which makes it harder for Finance Minister Arun Jaitley to assess the size of the fiscal stimulus required to help boost the economy.

The government said it expects the annual gross domestic product (GDP) to grow at 7.4% in the current fiscal under a new method for computing national accounts, thereby resulting in the upward economic growth rate.

Shifting the base year from 2004-05 to 2011-12, the Central Statistical Office estimated GDP growth during 2014-15 at 7.45% as compared to 6.9% in 2013-14. It has also revised the growth rate for the first half of 2014-15 to 7.4% from the 5.5% it had earlier reported under the old method.

"Inflation and food inflation, in particular, are at a record low due to a number of decisive measures taken by the government," the president said.

Wholesale inflation went into negative territory in January for the second time in 3 months as the fall in petroleum and food prices pulled it down to a five-and-a-half year low of -0.39%. The food inflation was at 8%.

Mukherjee also said that capital formation has increased, after a period of near stagnation in last few years.

However, the Confederation of Indian Industry has said earlier this month in a statement that "growth in capital formation still remains weak at 1.3% and needs to be strengthened."

Commenting on the change in data procedures, Reserve Bank Governor Raghuram Rajan said last month: "We may be reaching the outskirts of the woods but we are not out of the woods yet. So I don't think any data that suggests we are out of the woods at this point, we would put too much weight on it."

Hinting at the government's intent to seek a consensus on passing the land acquisition bill, Mukherjee said the interest of farmers and land owners has been protected in the fine-tuning of the bill.

"While taking utmost care to protect the interest of farmers, including their compensation entitlements, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act has been suitably refined to minimize certain procedural difficulties in acquisition of land inevitably required for critical public projects of infrastructure," he told parliament

In December, by an executive ordinance the government made significant changes in the Land Acquisition Act, including removal of a consent clause for acquiring land for purposes of industrial corridors, public-private partnership projects, rural infrastructure, affordable housing and defense.

The Bill is likely to be introduced in the ongoing session to replace the ordinance.

Social activist Anna Hazare has called for a two-day agitation against the law here. Protests are also planned by Congress under its vice president Rahul Gandhi. The Aam Aadmi Party has also decided to support Hazare's protest.

"Inclusive growth covering the poorest of poor is the government's top priority," Mukherjee said.

President Mukherjee said that inclusive growth was a top priority of the government and it was committed to expand the job market.

He said the government was streamlining scholarship schemes concerning the Scheduled Castes and Scheduled Tribes and minorities to ensure their timely disbursement.

The My Gov Online Platform has ensured public participation in decision-making and better implementation of flagship programs like the Swachh Bharat Mission, Namami Gange, the Pradhan Mantri Jan Dhan Yojana and the NITI Aayog, the president said

At a time when the focus is on unaccounted wealth stashed away in foreign accounts and on corporate espionage, Mukherjee said: "My government is committed to taking all possible measures to stop generation of black money, both domestically and internationally."

He also said the government is aiming to take the share of clean energy up to 15% in the next seven years.

The process for 25 mega solar parks has been approved and implementation of green energy corridor has been accelerated, he added.

"A new tourism policy is on the anvil," Mukherjee announced

He said infrastructure facilities were being improved at tourist destinations and dedicated trains had been started for some pilgrimage destinations.

Japan

Japan’s economy pulled out of recession more slowly than expected last quarter, with soft spending by businesses and consumers underscoring the challenges facing Prime Minister Shinzo Abe as he tries to steer the nation to a robust recovery.

The worst is likely over for Japan in the near term, economists said recently, but Mr. Abe still faces a difficult balancing act as he tries to get prices and wages to rise at the same time. Growth last quarter was driven by exports, while sustainable expansion depends on instilling confidence in consumers who account for around 60% of the economy, and whose wages have been rising more slowly than prices for more than a year.

“I was surprised by how weak household spending was,” said Shotaro Kuga, an economist at Daiwa Institute of Research, said of the fourth quarter results. “The economy is recovering—it’s just the pace of the recovery is less than forecast.”

Fueled by exports, Japan’s gross domestic product increased at an annualized rate of 2.2% in the three months through December, well below the 3.6% growth forecast by economists.

Exports rose 2.7% from the previous quarter, the biggest increase in four quarters, indicating that Mr. Abe’s weak-yen policy—the currency has fallen by around a third against the U.S. dollar since late 2012—is finally having the desired effect of significantly increasing exports. Exports to China, Japan’s second-largest export destination, in December totaled ¥1.27 trillion, the highest for a single month since December 2010. Exports to the U.S., its biggest market, totaled ¥1.4 trillion, the most since 2007.

But Japan may not be able to count on exports for growth, said Goshi Kataoka, senior analyst at Mitsubishi UFJ Research and Consulting Co., who pointed to risks including slowdowns in China and Europe, which also faces the possibility of a turbulent exit by Greece from the eurozone. “I am a little concerned about the outlook for exports,” he said. “The current pace of export growth is unlikely to be sustained.”

Thailand

Thailand’s economy in the fourth quarter beat expectations by expanding 2.3% from a year earlier. At that pace, it’s extending a two-year streak of lagging behind its neighbors in Southeast Asia.

Thai GDP increased 0.7% overall in 2014, the slowest in three years as political unrest curbed local consumption and tourism, while lower agricultural prices and cooling global demand hurt exports. Although fourth-quarter growth of 2.3% beat the consensus forecast of 2%, it paled versus the Philippines’ 6.9%, Malaysia’s 5.8% and Indonesia’s 5%, data compiled by Bloomberg show.

“The last few years have been somewhat challenging for Thailand,” said Rahul Bajoria, a Singapore-based economist at Barclays Plc. “Domestic demand has slowed down as household debt remains high and export growth remains muted. Countries like Malaysia, Philippines and, to a certain extent Indonesia, have done a little bit better in getting domestic investment high, and that’s a missing area in Thailand at this point.”

The World Bank last month projected Thailand’s GDP will rise 3.5% this year, the weakest compared with estimates for the Philippines, Indonesia and Malaysia. Thai exports fell 0.3% in 2014, compared with a 9% gain for the Philippines and 7% for Malaysia, Bloomberg data show.

Thailand for much of the late 1980s and early 1990s was among the world’s fastest-growing economies, as tourists flocked to Phuket, Bangkok and Pattaya, and companies such as Toyota Motor Corp., General Motors Co. and Ford Motor Co. poured in billions of dollars to make it Southeast Asia’s automotive hub.

EUROPE / AFRICA / MIDDLE EAST

Germany

Germany's economy grew even faster than previously thought in 2014, lifted by a surge in consumer spending and investment, official statistics show.

Full-year gross domestic product was up 1.6% over 2013, confirming preliminary figures released in mid-February. Initially statisticians had said Germany's GDP growth in 2014 was 1.5% higher than one year prior.

A strong uptick in consumer spending and business investments in the fourth quarter were the main driver behind 2014's strong performance. Domestic spending was up 0.8% on-the-quarter from October to December. Companies also spent 0.4% more.

Employment in Germany is at a post-reunification high, with more than 43 million people working.

A weak euro has buttressed Germany's already strong export industry and in the fourth quarter last year, exports grew at a rate of 1.3% - 0.3 percentage points faster than imports.

Germany, Europe's largest economy, also logged a budget surplus of 0.6% of output in 2014, official data showed. That figure compared to an initial estimate of 0.4% announced in January.

Countries within the European Union are not permitted to have budget deficits exceeding 3% of GDP, according to the bloc's seminal pact, the Maastricht treaty.

Italy

The Italian economy will grow by 0.6% this year, according to the Organization for Economic Cooperation and Development, raising its forecast from an earlier 0.2% prediction made in November.

The latest OECD projection for the euro zone's third largest but most sluggish economy is in line with those of the International Monetary Fund, the Italian government and central bank.

The modest rise in gross domestic product in 2015 would mark the first year of expansion after a three-year recession. Italy has not posted a single quarter of growth since the middle of 2011.

The 114-page report on Italy's economy contained a 2015 growth forecast of 0.4%, but the OECD's head Angel Gurria told reporters at a presentation that the most recent developments had prompted an upward revision.

The Paris-based think-tank raised its forecast for 2016 growth to 1.3% from 1.0% projected in November.

The recovery will be underpinned by the European Central Bank's expansionary measures, the depreciation of the euro which will help exports, the plunge in oil prices, and less restrictive fiscal policies by the government, the OECD said.

However it added that "risks are to the downside," warning the ECB's bond-buying program may fail to revive credit and "market sentiment could turn against Italy with its history of low growth and high debt."

On public finances, the OECD trimmed its forecast for Italy's budget deficit this year to 2.7% of gross domestic product from 2.8%, below the EU's 3% ceiling and broadly in line with Rome's 2.6% target.

However it said Italy's public debt, the largest in the euro zone after Greece's, will continue its upward trend, reaching an all-time record of 133.5% of GDP in 2016 from a projected 132.8% this year.

The OECD once again recommended that Italy adopt structural reforms to its labor market and judicial system, increase competition, simplify legislation and tackle corruption.

If reforms planned by Matteo Renzi's government over the next two years are fully implemented they could raise GDP by 6% in 10 years' time, it said, echoing similar encouraging estimates made to Mario Monti's technocrat government in 2012.

"In the past, many good reform projects were not fully implemented, depriving the economy of their full benefits," the report noted.

For now, the OECD estimated that Italy's potential growth rate - which estimates the cruise speed the economy can grow at without generating inflation - stands at just 0.2%.

Nigeria

Nigeria’s real Gross Domestic Product (GDP) growth rate further dropped to 5.94% in the fourth quarter (Q4) of 2014 compared to 6.23% in the third quarter, according to the National Bureau of Statistics (NBS).

The NBS, in its quarterly GDP estimates, added that Q4 GDP was 0.28% lower than the estimates for the previous quarter, adding that the economy grew by 3.84% in Q4 2014 when compared with the previous month.

Interestingly, the statistical agency noted that despite the production and oil price challenges in the petroleum sector within the period under review, average daily production of crude oil increased to 2.18 million barrels per day (mbpd) compared to 2.15 mbpd in the third quarter.

Nevertheless, nominal GDP in Q4 2014 was estimated at N24.20 trillion compared to N22.93 trillion in Q3 as well as N21.40 trillion in the corresponding quarter of 2013.

In Q4 2014, the non-oil sector recorded 6.44% growth in real terms though lower 7.51% in Q3.

According to the NBS, the non-oil sector growth was largely driven by growth in the crop production, trade, textile, apparel and footwear, and real estate sectors.

In real terms, agriculture sector GDP grew by 6.28% (Year-on-Year) in the fourth Quarter of 2014, down by 2.91% from the previous quarter-with Fishing recording highest growth rate of 14.68%, followed by Livestock at 12.70%.

Agriculture contributed 22.07% to nominal GDP and 23.86% in real terms within the period under review. On the other hand, the oil sector also grew by 1.18% in Q4 2014, contributing 8.97% to real GDP compared to 10.45% in Q3.

The manufacturing sector contributed 9.11% to nominal GDP in Q4, down from 9.77% in the previous quarter.

The contribution of Manufacturing to Nominal GDP was 9.11% in the fourth Quarter of 2014, up from 8.65% recorded in the fourth quarter of 2013 and 9.77% in the third quarter of 2014.

Real GDP growth in the sector stood at 13.47% (year-on- year), down from 24.59% growth recorded in fourth Quarter of 2013, representing 2.52 percentage points lower than the figure recorded in quarter three, 2014.

Russia

Russia’s economy minister said that the country’s gross domestic product is expected to shrink by 3% in 2015 with oil prices at $50 a barrel and an estimated capital outflow at $115 billion, Russian news agencies reported.

The government previously predicted the decrease in GDP at 0.8%. Inflation in 2015 is now forecast to stand at 12%, up from the previous estimate of 7.5%, Alexei Ulyukayev said, Russian news agencies reported.

The announcement comes a day after the Russian central bank unexpectedly lowered its key interest rate by two percentage points, sending the ruble lower. Russia was also recently downgraded to “junk” level, below investment-grade, by the credit rating company Standard & Poor’s amid the mounting violence in eastern Ukraine.

Russia has previously warned that the country’s already ailing economy will slip into recession in 2015, tarnished by billions of dollars in capital outflow, falling oil prices and Western sanctions.

Mr. Ulyukayev presented the figures the government will use to revise previous forecasts and account for falling oil prices and the pressure of sanctions over Moscow’s annexation of Crimea in 2014 that cut Russia off from Western capital.

South Africa

South Africa’s economy, the continent’s second-largest, grew at a faster pace than economists predicted in the fourth quarter after manufacturing and mining rebounded from a series of strikes.

Gross domestic product increased an annualized 4.1% compared with the previous quarter, when it expanded a revised 2.1%, the statistics office said in a report released in the capital, Pretoria. The median estimate of 20 economists in a Bloomberg survey was 3.8%. The economy grew 1.5% for the whole of last year, the slowest pace since a 2009 recession.

“This is the first quarter that most of the industries actually went back to normal production,” Gerhardt Bouwer, executive manager of national accounts at Statistics South Africa, told reporters. “Hopefully we can keep this trend.”

Manufacturing, which makes up 13% of the economy, expanded for the first time in four quarters, increasing an annualized 9.5%. Mining surged 15.2%.

Growth may come under pressure again after power blackouts since last month disrupted factory output. Finance Minister Nhlanhla Nene is set to revise his 2.5% GDP growth forecast for this year when he delivers his national budget to lawmakers in Cape Town.

“We are still waiting to see what will happen with the electricity shortages and how that will affect the economy,” Francois Stofberg, an economist at Efficient Group in Pretoria, said by phone. “That will be the biggest determinant of how the economy will perform this year.”

The median estimate of 22 economists surveyed by Bloomberg is for the economy to expand 2.3%in 2015.

The rand fell 0.2% against the dollar to trade at 11.6530 as of 12:12 p.m. in Johannesburg after earlier strengthening to 11.6345 following the release of the data.

Agriculture expanded an annualized 7.5% in the fourth quarter, while the finance industry grew 3.5% and construction gained 3.5%. The retail and wholesale trade industry, which makes up 15% of the economy, contracted 0.3%

Sluggish growth and a slowdown in inflation prompted the Reserve Bank to leave the benchmark repurchase rate unchanged at 5.75% at its last three meetings. Consumer prices increased 4.4% in January from a year ago, the slowest pace in almost four years.

“It appears as though the economy is in a rut,” Reserve Bank Governor Lesetja Kganyago said on Feb. 17. “Weak demand leads to low investment, weak investment means no growth in employment and household incomes.”

Ukraine

As the supposed cease-fire in Ukraine fails to end the bloodshed in the east of the country, fresh data showed the extent of the pain being felt within the country's economy.

The country - ravaged by conflict between government troops and pro-Russian separatists – posted a fall in gross domestic product (GDP) of 15.2% year-on-year in the fourth quarter of 2014, according to the State Statistics Service of Ukraine. The figures also showed a 3.8% fall from the previous quarter amid the political upheaval in Kiev.

The data were the worst for several years and are significantly down from the 5.3% contraction (year-on-year) recorded in the third quarter. They also come alongside some dismal trade balance data, which highlighted weak domestic demand in the country.

Timothy Ash, head of emerging markets at Standard Bank, said the figures were a sad indictment of the international community.

"Despite all the rhetoric that they would not allow Ukraine to fail, they failed to support Ukraine in its hour of need," he said in a note.

"Western credit disbursements were a fraction of what was promised, but at the same time the Ukrainians were advised to pay external debt payments in full, and to clear gas debts to Russia."

Ukraine's trade deficit – when imports exceed exports -- narrowed sharply in 2014 to $468.3 million, according to Reuters, as demand waned. This was significantly down from 2013's $13.5 billion and was due to a collapse in imports and a sharp depreciation of Ukraine's hryvnia currency.

Ukraine was thrown into turmoil at the start of last year, after protests between anti-government and pro-EU demonstrators led to a change of leadership. Tensions on the streets of Kiev turned into military conflicts on the eastern border, with Moscow accused of aiding pro-Kremlin rebels in the region. Moscow continues to deny the involvement of Russian troops in the conflict.

Billionaire investor George Soros is one notable voice that has called on European officials to urgently boost their efforts to support the Ukrainian economy. In January, he argued that strengthening Ukraine's economy was more important to the euro zone than the ongoing political uncertainty in member countries like Greece.

The International Monetary Fund (IMF) has introduced a new Extended Fund Facility for Ukraine, in addition to its existing aid package for the country. It has also received financial help from the U.S., the European Union and the World Bank. However, Ukraine appears to need more money to stay afloat, according to Ash, amid rampant inflation and the near-halting of economic activity in regions where there is still military conflict.

"Beyond the IMF, official creditors in general need to cut out the cheap talk of supporting Ukraine, and preventing its financial meltdown - accept that they failed already and to figure out how they actually rebuild from here," he said.

"Arguably if the West is set on not arming Ukraine then it really needs to do more to financially support the country in its hour of need. Talk is cheap, and actions speak much louder than words."

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