With the host nation responsible for infrastructure
projects linked to the Games — such as the Olympic Village housing and
new transport links — the Greek government's budget for the Games has
ballooned from 2.5bn euros to 4.6bn euros. But, PwC says that even this
estimate may still be too low as the newly elected government has accused
the previous administration of "losing control" of Olympic
spending. In fact, some costs have not even been included on the Olympic
bill, PwC added.
Up to 1.3bn euros for transport improvements and the
600m euro athletes' village have been excluded — the latter because it
is being built by the Workers Housing Organisation and will be sold off to
low-income families after the Games.
With most activity and expenditure on the event
concentrated in 2003-2004, the government's budget deficit has more than
doubled since 2002, the study adds.
Official figures show the 2002 deficit was just 1.4% of
gross domestic product (GDP), but a year later this had risen to 3.2% of
GDP — way above EU limits and sharply higher than the country's original
0.9% target. EU forecasts suggest the figure will remain the same in 2004
before dipping back to 2.8% a year later.
AFRICA'S 'TRAGIC' ECONOMIC RECORD
Africa's growth record in the post-colonial era has
been an "economic tragedy," according to a report from the World
In a damning assessment of the continent's economy, the
report says income per head has fallen by 11% in sub-Saharan Africa since
1974. The long-awaited revival of the African economy has not yet taken
place," it concludes.
The report was unveiled at an economic summit in
Mozambique's capital, Maputo.
It looked set to overshadow the conference, aimed at
taking stock of an ambitious plan to revitalise the African economy.
The plan – dubbed the New Partnership for Africa's
Development, or Nepad commits African nations to improving financial
accountability and raising governance standards in order to boost
investment from rich countries.
The WEF report ranked Botswana top out of 25 African
countries in terms of competitiveness, crediting the quality of its
political institutions and its stable macroeconomic environment. Tunisia
was in second place, followed by South Africa, while Chad came bottom of
WEF chief economist August Lopez-Claros acknowledged
that the report's findings were not encouraging, but stressed that they
could be used to draw up solutions to Africa's problems.
"African countries do not, on the whole, perform
well in this study," he said.
"It is difficult to pinpoint a single group of
African economies that have experienced high, sustained per capita income
US OIL PRICES BREAK NEW RECORDS
US oil prices closed at a record $42.32 a barrel, after
an attack by Islamic militants on a residential compound in Saudi Arabia
which left 22 people dead.
There is growing concern that al-Qaeda-inspired
violence may now target the disruption of oil supplies from the world's
biggest oil exporter.
Recent attacks have focused on offices and housing
compounds rather than on stopping the flow of oil.
Brent crude had surged $2.50 to $39.08 by the close in
Meanwhile, US light, sweet crude closed more than 6%,
or $2.44, higher in New York at $42.32 — just off record highs of
DISCOUNTS DRIVE US CAR SALES RISE
US car sales picked up in May despite surging oil
prices, as heavy discounts lured in more buyers.
General Motors (GM) reported a better than expected
6.5% jump in sales, boosted by an 11% surge in truck sales.
Chrysler, meanwhile, reported a 5% increase on strong
demand for its new flagship sedan, the Chrysler 300.
But Japanese carmakers made the biggest gains,
increasing market share by 2% despite offering smaller incentives than
Nissan sales were up 24% on the previous year, with
Toyota, now the US number two seller, up 8.4%.
Toyota' spent more on incentive packages — including
loan rebates and discounts — than its Japanese rivals at an average of
But that was significantly below even the least
generous US carmaker, Ford, which averaged $4,297.
In total, Japanese firms saw sales rise 9.9% to
567,000, against an overall rise of 3.4% in US sales to 1.63 million
AUSTRALIA'S ECONOMIC GROWTH SLOWS
Australia's economy slowed down in the first quarter of
2004, hit by a poor trading performance and a cooling housing market,
official data showed.
The economy expanded just 0.2% in the first quarter of
2004, compared to 1.3% in the last three months of 2003, the Australian
Bureau of Statistics said.
But the strengthening global economy should improve
Australia's performance, Treasurer Peter Costello said. Record highs for
the local currency against the US dollar hurt exports. Falls in the US
dollar helped push Australia's currency to a seven-year high of 80.05 US
cents in February 2004.
US OUTPUT SEES UNEXPECTED SURGE
United States industrial production rose unexpectedly
in May, according to the Institute for Supply Management. The industry
body's index rose to a forecast-beating 62.8 in May from 62.4 the month
before. Factory employment reached the highest levels seen in 31 years,
although the price paid for goods dropped.
A healthier jobs market will give the Federal Reserve
more reason to raise interest rates from 46-year lows of 1%, analysts
said. Interest rates are expected to rise this month for the first time in
TAKEOVER PLAN VALUES M&S AT £9BN
Retail entrepreneur Philip Green has revealed the
outline terms of a possible bid for Marks & Spencer. Existing M&S
shareholders will be offered up to £7bn in cash as well as a 25% stake in
a newly-listed company, valuing the firm at an estimated £9bn.
VISA DELAYS 'COST US FIRMS $30BN'
Delays in granting visas for business travellers have
cost US firms at least $30bn (£16.2bn) since July 2002, says a survey by
eight corporate lobby groups.
Extra security checks were introduced in July 2002,
forming part of the greater vigilance in protecting the US after the 11
September 2001 attacks.
But delays, and a new vetting system, have brought lost
sales and higher costs, the Financial Times reported. Companies dealing
with politically sensitive technology were worst hit.
RUSSIAN TYCOON TO REFORM GEORGIA
Georgia's Government has handed control of the economy
to a Russian tycoon, in an attempt to kickstart radical reform.
Kakha Bendukidze, a millionaire who owns the United
Heavy Machinery (OMZ) group, becomes economy minister with a brief for
Mr Bendukidze, who was born in Tbilisi, has long argued
for reform in Russia and has sided with liberal tycoons such as the
imprisoned Mikhail Khodorkovsky.
Georgian President Mikheil Saakashvili wants to see
economic growth take off.
MOBILE COMPETITION LIFTS CARPHONE
New handsets and fierce competition between rival
networks have helped to boost profits at phone retailer Carphone
Pre-tax profit for the 12 months to 27 March came in at
£44.5m ($81.4m), compared with £34.5m last year.
The firm said its new landline service TalkTalk now had
385,000 users in Britain and it expected to reach 900,000 customers by
Carphone Warehouse operates about 1,200 stores across
10 European markets.
BIG NIGERIA PHONE DEAL CALLED OFF
A South African mobile phone giant has pulled out of a
$200m deal with Econet Wireless Nigeria (EWN).
In a statement, Vodacom said the pair had
"mutually agreed to terminate their current management agreement on
an amicable basis".
Vodacom also said its deputy chief executive, Mthobi
Tyamzashe, had been sacked amid a management shake-up following the
Nigeria decision. It followed mounting speculation that Vodacom was set to
ditch the deal.
ARGENTINA MAKES NEW OFFER ON DEBT
Argentina has unveiled a new offer to repay most of its
multi-billion dollar debt including overdue interest demanded by
Under the offer, Argentina will cut its almost $100bn
debt by $60.9bn as well as issuing $38.5bn more in new bonds.
"The proposal is made with assumptions that do not
put in risk the future of Argentina," Economy Minister Roberto
Lavagna said. He added the deal represented a 75% cut in the present net
value of the debt. The original offer made by the government referred only
to the nominal, or face value, of the debts.
In 2002 Argentina defaulted on almost $88bn of debt, in
the midst of its worst-ever economic crisis, and investors have not seen
their money since.
RENAULT LAUNCHES 5,000 EURO CAR
French carmaker Renault has unveiled its budget 5,000
euro (£3,335; $6,110) car as the company attempts to drive growth in
Renault hopes the new Logan sedan will help it achieve
annual sales of four million vehicles by 2010.
PROFITS RISE AT CABLE & WIRELESS
Telecoms group Cable & Wireless says it has started
to turn the company around after reporting an upturn in profits.
Releasing its annual results, the firm made a pre-tax
profit of £317m for the 12 months ending 31 March, compared to £79m for
the year before.
UK RETAIL SALES SPARK RATE RISE FEAR
Retail sales grew at their fastest pace in more than
two years last month as shoppers continued to flock to the High Street,
according to the CBI.
Its latest distributive trades survey showed 65% of
retailers reported sales up on a year ago in May, while only 14% said they
This was the strongest reading since April 2002 and is
likely to trigger calls for more UK base rate rises.
Increased consumer spending could force a rise as early
as next week.
The Bank of England's Monetary Policy Committee (MPC)
now looks increasingly likely to abandon its steady approach of raising
interest rates once every quarter and go for a more aggressive stance,
CHINA TIGHTENS BANKING CHECKS
China's banking regulator has ordered tighter scrutiny
of bank lending as part of a government campaign against reckless
Loans to build new industrial and commercial premises
will be halted unless they have received government approval, it said.
The China Banking Regulatory Commission told all
domestic lenders to carry out checks on loans above 30m yuan ($3.6m).
Beijing is trying to curb imbalances in China's fast growing economy.
SHOPS 'TO SCORE WITH EURO 2004'
Euro 2004 could provide a huge boon to the UK economy,
but could mean a headache for the Bank of England's rate setting
committee, economists say.
Spending by business and consumers may hit £1.05bn,
the Centre for Economic and Business Research (CEBR) said.
But the boost may distort retail sales data making it
hard for the Bank to judge the impact of recent rate rises.
The football tournament kicks off in Portugal on 12
June. By contrast, the 2002 World Cup hurt the UK economy.
WOODSIDE TO PUMP MAURITANIA OIL
Woodside Petroleum said it plans to invest A$8370m
($600m) in developing Mauritania's Chinguetti oil project, off the West
African country's coast.
The Australian firm's decision to go ahead with
production is a boost for one of the world's poorest states.
Woodside expects to extract 75,000 barrels of oil a day
from Chinguetti, starting production in March 2006.
Woodside said the field could account for 12% of its
annual revenue by 2008; its shares rose 2.5% in Sydney.
CENTRAL AMERICAN TRADE DEAL DONE
A Central American Free Trade Agreement (Cafta) has
been signed by the US and five countries in the region.
Cafta should help ease poverty, foster development and
strengthen democracy in the region, US Trade Representative Robert
Costa Rica, El Salvador, Guatemala, Honduras and
Nicaragua signed the deal.
The agreement, which is subject to approval by US
Congress, was opposed by labour activists and environmentalists. They say
the deal will cause suffering for workers and farmers, as well as for the