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Global
Top Economic Reports September 30, 2013 By Global Economic Team| Germany Economics: Grand Coalition - Either Way: Despite a surge in voter support, Angela Merkel's CDU/CSU narrowly missed an outright majority of seats in the new Bundestag. Assuming the SPD and the Greens stand by their commitment not to enter into a coalition with the Left-Party, a Grand Coalition between the CDU/CSU and the SPD now looks most likely to form a government. Such a Grand Coalition would enjoy a broad majority in both houses of parliament as the SPD captured the Bundesrat majority a while ago. Elga Bartsch US Economics: As the Washington World Turns: October likely holds two drop-dead dates for the operation of the US government. ▪ Congress has to provide budget authority to fund government operations before October 1st. ▪ The debt ceiling limit becomes binding by November. ▪ The debate over these two issues is likely to be punctuated with high drama that raises headline risk and the risk of a government shutdown and technical debt default. Vincent Reinhart US Economics: Households Finally "Feel" the Recovery: Since mid-2009, US households have continually asked, "what recovery?" Barring the financial crisis, consumer confidence has historically averaged a reading around 80 during recoveries. Four years on, consumer confidence has only recently risen to a "normal" recovery level. Vincent Reinhart US Economics: Credit Cards Still Out of Favor, But That May Soon Change: Five years after the fall, US households remain reluctant to use credit cards. We find that consumer confidence tends to lead growth in revolving credit (primarily credit cards) by about six months. Recent increases in confidence suggest credit card usage may soon pick up. Vincent Reinhart China Economics: What has changed and what has not? Macro data in China indicates a further rebound in growth since July. Yet there are at least three important questions for close China watchers to answer before shifting focus to the reform roadmap from the Third Plenary of the 18th CPC: 1) Is this rebound sustainable? 2) Has deleveraging started or reversed? 3) Is China rebalancing towards a consumption-driven growth model? Helen Qiao India Economics: Hawkish Tone but Risky Move on Cut in Short-term: Real Rate to Zero: RBI Policy Actions: The Reserve Bank of India (RBI), in its mid-quarter review of monetary policy on September 20, announced the following policy changes: 1) a reduction in the marginal standing facility (MSF) rate by 75bp to 9.5% from 10.25% with immediate effect; 2) an increase in the policy repo rate under the liquidity adjustment facility (LAF) by 25bp to 7.5% from 7.25% with immediate effect; and 3) a reduction in the minimum daily maintenance of the cash reserve ratio (CRR) to 95% of the requirement from 99% effective the fortnight beginning September 21, 2013. The RBI kept the CRR unchanged at 4%. India Economics Team |
