INTERNATIONAL

 

Feb 16 - 22 , 2004

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF


GERMAN ECONOMY CREEPS INTO GROWTH

The recession-mired German economy has started to grow, but at a slower rate than most analysts expected. During the fourth quarter of 2003, annual output growth was just 0.2%, according to preliminary figures.The news confirms that the downward trend of 2003 is at last starting to reverse, but much less resolutely than economists had hoped. And the 0.2% rise could have been the result of statistical factors, meaning that actual performance was stagnant. In France, by contrast, growth was 0.5% in the fourth quarter, preliminary figures indicated.

 

 

 

 

The figures, which are due to be released in expanded form, do offer some hope for likely performance in 2004. The component of gross domestic product relating to consumption was relatively strong, the Federal Statistics Office said. This could be an indication that companies are starting to invest more, something that could promise eventually to reduce Germany's heavy unemployment. "The relatively strong domestic demand gives cause for hope that 2004 will be better," said Bernd Weidensteiner of DZ Bank. "At some point consumption will become unblocked and then all the pieces of the puzzle will be in place for a recovery."

BUSH SEEKS TOUGHER NUCLEAR CURBS

US President George W. Bush has called for co-ordinated international action to curb the spread of nuclear weapons. In a speech at the National Defense University in Washington, he demanded a strengthening of international treaties and the UN nuclear watchdog. This would include a limit on the number of nations allowed to produce nuclear fuel. Mr Bush said nuclear weapons in the hands of terrorists and "outlaw regimes" were a threat to world peace. His comments came in the wake of a major scandal involving a leading Pakistani scientist.

The "father" of Pakistan's nuclear bomb, Dr Abdul Qadeer Khan, has admitted supplying nuclear technology to North Korea, Iran and Libya through a black market. The BBC's Rob Watson, in Washington, says the timing of the speech was decidedly political, coming from a president seeking to regain the political initiative in the vital area of national security. Our correspondent says this was radical stuff from Mr Bush, proposing nothing less than the unpicking of the 30-year-old bargain between the nuclear haves and have-nots.

The president said international treaties intended to regulate the development of nuclear power needed to be strengthened to stop countries producing material which could be used for weapons.North Korea and Iran had both done this by exploiting loopholes allowing the enrichment and reprocessing of uranium for peaceful purposes, he said and this had to be stopped. He called on the 40 countries of the Nuclear Suppliers Group, which sell nuclear technology, to refuse to sell equipment to any country not already equipped to make nuclear fuel.

BANK FORECASTS STRONG UK GROWTH

The UK economy is set to grow strongly in the coming year as the global economic recovery takes hold, the Bank of England has said. The Bank also predicted that the new consumer price index (CPI) inflation measure will rise in 2004. However, it said that inflation was not expected to breach the 2% target level for two years. But some analysts said the Bank's comments indicated that there could be more interest rate rises on the way. The Bank's latest quarterly Inflation Report said price growth was expected to rise from the middle of the year, partly due to higher utility prices.

AUTO SALES STALL US RETAIL GROWTH

US retail sales surprisingly dropped for the first time in four months in January, as automobile sales stalled. Figures from the US Commerce Department showed retail sales falling 0.3% last month to $322.87bn. Analysts had expected shoppers, who have driven the economy along over the past three years, to keep up the same pace of purchases as in December. Excluding autos, however, retail sales posted a 0.9% increase with strong clothes and grocery sales. The figures come a day after Federal Reserve chairman Alan Greenspan said the economy was growing vigorously and reassured investors that no interest rate hike is imminent. Sales of motor vehicles dropped by 3.9% but the rest of the retail sector was boosted by a cold winter.

US SHOULD BALANCE, SAYS GREENSPAN

Federal Reserve chairman Alan Greenspan has painted an upbeat picture of the US economy, at the same time as cautioning against the spiralling budget deficit. Presenting the twice-yearly central bank report, he predicted that the US economy will grow between 4% and 5% in 2004, up from previous estimates. Yet he also warned that the country's vast and seemingly ever-growing budget deficit could pose a problem in both the short and long terms. He called for more budget balance. Mr Greenspan told a House of Representatives panel that the runaway budget deficit a political hot potato in this year of presidential election could create serious fiscal difficulties when the 'baby-boom' generation retires.

BIRD FLU HITS US POULTRY INDUSTRY

A second outbreak of avian bird flu in the US is threatening to damage the country's multi billion-dollar poultry industry, officials have warned. Even though the strain found in the infected birds is not thought to be transmittable to humans, buyers are not taking any chances. China and Brazil have joined countries including Japan and South Korea and banned all US poultry imports.Russia, the biggest buyer of US birds, has scaled back its purchases. The US's total poultry exports are valued at more than $1.7bn (900m; 1.3bn euros) a year. According to Richard Lobb, a spokesman for the National Chicken Council, the "timeframe for restoring normal trade relations has lengthened a bit because of this second flock".

MICROSOFT SOURCE CODE LEAKED OUT

Computer software giant Microsoft says parts of the tightly guarded blueprints of its Windows operating system have been leaked over the Internet. Microsoft spokesman Tom Pilla said the company did not know how much of the source code had been leaked, or how many people may have access to it.

DELL

The world's second biggest PC-maker, Dell Computer, has posted net profits of $749m(396m) for the fourth quarter, up from $603m a year earlier.

GLAXO

GlaxoSmithKline has reached its 2003 profit targets. Pre-tax profits for 2003 rose 8% to 6.72bn, with turnover up 5%, partly due to strong sales of its asthma drug.

VODAFONE

Mobile telecoms giant Vodafone has said it is launching third generation (3G) services in the UK.

NEWS CORP

News Corp, the Rupert Murdoch-run media company, has reported a jump in profit, helped by its newspapers and TV channels, including Fox News. Profit in the quarter to 31 December surged 51% to $361m (191m) from a year earlier while sales rose 19% to $5.6bn.

 

 

UNILEVER SALES HIT BY ATKINS DIET

Unilever sales failed to reach their targets as consumers ditched SlimFast in favour of the Atkins diet but the hot summer boosted ice cream sales. Sales of the Anglo-Dutch firm's leading brands rose only 2.5% missing targets of 5-6% growth set out last year.

FRANCE TELECOM

The company's full-year net profit was 3.2bn euros (2.2bn; $4.1bn), compared with a loss of 20.7bn euros in 2002.

AIR FRANCE AND KLM GET GO-AHEAD

The planned merger between Air France and KLM has been given the go-ahead by the European Commission.Creating the world's largest airline, the two flag carriers first announced the coming together back in September. The Commission has now approved the merger, but only after Air France and KLM agreed to surrender 94 take-off and landing slots per day to their rivals. In 2002-2003 the combined turnover of the two airlines was some 19.17bn euros ($24.5bn; 13bn).

UK JOBLESS TOTAL CONTINUES TO FALL

Unemployment in the UK fell to a fresh two-and-a-half year low in the final quarter of 2003, official figures show. The total fell by 21,000 to 1,459,000 during the three months to December. The UK jobless rate edged lower to 4.9% the joint lowest level since records began in 1984 - the Office for National Statistics (ONS) reported.

DIGITAL TROUBLE HITS NIKON SHARES

Shares in Nikon, the Japanese camera maker, have slumped 10% after the firm warned falling revenues from digital cameras would hit its bottom line. The company's announcement of a 7.4bn yen ($70m; 38m) loss for the three months to December follows similar ones from rivals such as Fuji and Olympus.

EU SQUARES UP FOR BUDGET BATTLE

Brussels has unveiled plans to boost EU spending setting the scene for a battle with finance ministers. The European Commission wants a major boost in spending as the EU expands from 15 to 25 members in May. But at least six states, including the EU's biggest contributors, want the budget capped at its current rate. The issue is exposing splits between the net givers who fear expansion could cost them billions and the net receivers, keen to maintain their aid. The current budget of around 100 billion euros (70 billion) a year amounts to 0.98% of the EU's GDP.Brussels wants to put the figure up to 1.22% of GDP in the years after 2007. That would still come in under the permitted upper limit of 1.24%.

PHILIPS

Dutch electronics maker Philips has announced it returned to profitability in 2003 following a year of job cuts and restructuring. The company recorded a full-year net profit of 695m euros ($885m; 476m), company officials said.

US DEMAND SAVES UK TRADE BLUSHES

Britain narrowly avoided a record trade deficit in 2003, as exports to the US offset flagging demand in Europe. A narrower-than-expected international trade gap in December of 4.16bn ($7.77bn) brought the full-year total to 46.4bn. The annual figure was just short of 2002's deficit of 46.6bn, the widest since records began. The UK's oil trade surplus shrank to 4.4bn, the lowest level since 1998 when it slipped to 3bn. Meanwhile, the annual surplus for services was 10.6bn, the lowest since 1996.

AGEIST ATTITUDES 'COST UK 30BN'

A million unemployed people over the age of 50 could be in jobs if industry and government shelved 'ageist attitudes', according to Age Concern. Up to 30bn could be added to the UK economy if people over 50 were brought into the workforce, the charity said. To ease older people back into work Age Concern said the government should scrap mandatory retirement ages.

DOLLAR SLIDE IGNORES G7 WARNING

The dollar has sunk against other major currencies, squashing hopes that a meeting of leading industrial nations in Florida could stem its decline. The meeting of finance ministers from the Group of Seven had condemned "excess volatility" in exchange rates. The warning was a dig at the way US authorities have encouraged the dollar's slide, at first underpinning a rally for the greenback. But the gain vanished to put the dollar at an 11-year low against the pound. The dollar did recover slightly towards the end of trading in New York, trimming its losses against both the euro and yen.

FACTORY OUTPUT REMAINS IN REVERSE

UK manufacturing output fell for the second month in a row in December casting doubt on a recovery in the beleaguered sector. Office for National Statistics (ONS) data showed output fell 0.1% after a revised 0.6% drop in November. The data conflicts strongly with recent evidence hinting that a manufacturing recovery is gathering pace. But there was some good news with factory-gate prices rising 0.2% on the month or 1.6% in the year to January.

CHINA PUMPS UP RURAL SPENDING

China's government is to pump an extra 30bn yuan ($3bn) into improving the lives of the country's 900 million farmers this year. The increased spending forms part of a push to close the wealth gap between town and country. It will pay for transport links, new rural industries, schools and welfare services. China's top governing bodies warned last week that stagnant farm earnings were putting stability and growth at risk.

 

 

BANGLADESH OPTS OUT OF TRADE DEAL

Six Asian nations, led by India and Thailand, have created a free-trade zone, but Bangladesh refused to sign the deal over compensation issues. India, Burma, Sri Lanka and Thailand pledged to boost investment and lower costs in a free-trade zone by 2017.

FARMERS DECRY US-AUSTRALIA PACT

Many of Australia's farmers are up in arms against the free trade deal their government has signed with the US. The deal, reached after two weeks of last-ditch talks, opens up US markets to many Australian goods. But it leaves key tariffs on Australian farm goods untouched while giving US farmers free access factors which Australian farmers see as a sell-out.