INTERNATIONAL

 

Oct 04 - 10, 2004

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF

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WORLD GROWTH 'FASTEST SINCE 1973'

The world's economy in 2004 should grow at its fastest rate for 30 years despite rising oil prices, the International Monetary Fund has said.
The IMF raised its forecast to 5% from 4.6% in what will be the strongest growth seen since 1973, if its forecast is accurate.
Rising corporate profits and strong housing markets boosted growth in 2004.
However, the IMF downgraded 2005's global growth forecast to 4.3% from 4.4%, citing oil prices as a concern.

 

 

 

 

In its twice-yearly World Economic Outlook, the IMF said 2005 growth "while still solid, will therefore likely be somewhat weaker than earlier expected".

It added: "The balance of risks has shifted to the downside with further oil price volatility a particular concern."

The global economy expanded by 3.9% in 2003.

IMF chief economist Raghuram Rajan said the rise in oil prices was likely to have only a moderate impact on growth and inflation in the industrialised world.

He said the developed countries are now more adept at dealing with oil price jumps and central banks have gained greater credibility in combating inflation.

But he warned emerging nations remained vulnerable and urged their central banks to be vigilant.

Worries about oil prices have heightened as crude soared to above $50 a barrel this week, amid increasing demand from China and India, and fears over supply disruptions in the Middle East and Nigeria.

UK WRITING OFF POOR NATIONS' DEBT

Gordon Brown has pledged the UK will write off its share of debts owed by the world's poorest countries.

The chancellor encouraged other rich nations to do the same in a bid to lift the burden of debt repayments from Third World nations.

The UK holds about 10% of the total debt owed to the World Bank and other development banks.

He made the announcement in a speech at St Bartholomew's Church, Brighton, last week, ahead of the Labour conference.

"Although there is no international agreement on 100% multilateral debt relief, Britain will do more," Mr Brown told about 400 debt-relief and fair-trade activists.

"We will pay our share of the multilateral debt repayments of reforming low-income countries.

"We will make payments in their stead to the World Bank and African Development Bank for the portion that relates to Britain's share of this debt."

His move will put pressure on other major creditors such as the US, Japan and Germany to follow suit at meetings of the IMF and World Bank.

France and Canada are already understood to be planning similar announcements.

Mr Brown currently holds the chair of the IMF and has long promoted policies to solve the international debt crisis, including 100% relief on bilateral debt owed directly to the UK by heavily-indebted countries.

Campaigners believe his initiative, for which 100m a year has been put aside, could mark a turning point in efforts to lift the burden of debt on the developing world.

It would free Third World governments to devote a higher proportion of their budgets to health, education and economic development.

KERRY, BUSH CLASH OVER IRAQ WAR

US President George W Bush and his Democratic challenger John Kerry have clashed in a TV debate on how to handle the war in Iraq and homeland security.

Mr Kerry called the conflict a diversion in the broader struggle against terror.

Mr Bush said he was confident of poll victory because he had shown the American people he knew how to lead.

The two men were taking part in the first of three televised debates in the run-up to November's election.

At times, the president seemed uncomfortable at the criticism, but was soon in his stride, says the BBC's Rob Watson in Miami where the debate was held.

There were several sharp exchanges, Senator Kerry at one point saying the president's certainty about issues did not make him right, but neither man appeared to deliver a knock-out blow.

They are set to meet in another two debates before the election itself on November 2.

As expected, Mr Kerry made Iraq the focus of his challenge against the president, saying the war in Iraq had been a diversion that had no links with the September 11 attacks and was a "colossal error of judgement".

"I believe in being strong and resolute and determined. And I will hunt down and kill the terrorists, wherever they are. But we also have to be smart. And smart means not diverting your attention from the real war on terror in Afghanistan against Osama Bin Laden," he said.

Mr Bush rejected Mr Kerry's accusation that invading Iraq had been the wrong priority, arguing that he had to deal with both Osama Bin Laden and Saddam Hussein.

FINANCE MINISTERS MEETING IN US

International debt relief and the value of the Chinese yuan are expected to be top of the agenda as global finance ministers meet for talks in Washington.

The US capital is hosting meetings of both the World Bank and International Monetary Fund (IMF), and the G7 group of leading nations.

China, which is being called upon to allow its currency to float freely, has been invited to join the G7 meeting.

 

 

In addition, all three meetings are to discuss the issue of debt cancellation.

Speaking ahead of the meetings, US Treasury Secretary John Snow said more debt relief is needed.

However, he did not specifically endorse a British proposal to erase all debts from the poorest countries.

CHINA'S THIRST FOR OIL GETS INTO TOP GEAR

China is not the biggest oil consumer in the world, that prize goes to America, nor is it the biggest importer which is also the USA.

What China outdoes the rest of the world at is the growth of its appetite.

Ten years ago China imported no oil at all. Last year it overtook Japan to become the world's second biggest importer.

Its thirst continues to grow. Imports are expected to rise another 40% this year.

For the international oil market it has all come as something of a shock.

The reasons are not hard to find.

The BBC Beijing bureau overlooks the city's second ring road.

Ten years ago, the road was devoid of traffic, the odd bus, a few taxis, and lots and lots of bicycles. Today it is gridlock.

At five in the afternoon it is more like a six lane parking lot. In the last few year, the Chinese have taken to cars with alacrity. Beijing now has more than two million private cars.

US GROWTH FIGURES REVISED UPWARDS

The US economy grew more quickly than previously thought in the three months to June, official figures suggest.

The US Commerce Department said it had revised its estimate for second quarter growth to 3.3%, up from its previous estimate of 2.8%.

Wall Street economists had predicted that second quarter growth would be upgraded to just 3%.

The Commerce Department said the new figure partly reflected an unexpectedly strong build-up of unsold goods.

Business stockpiled more goods during the April to June quarter than originally thought, offsetting a surprise decline in consumer spending, it said.

The higher growth estimate also reflected a downward revision in the value of goods imported into the US during the quarter.

The new growth estimate, although well below the 4.5% expansion recorded in the January to March period, will help soothe fears that the economic recovery is running out of steam.

JAPAN'S PRODUCTION GROWING AGAIN

Japanese industrial production grew in August for the first time in three months, official data has shown.

Although only a month-on-month rise of 0.3%, and below some forecasts, the news saw Japan's leading shares rise for the first time in nine days.

Easing fears that Japan's economic recovery was stalling, the Ministry of Economic, Trade and Industry (METI) now expects a 1.3% rise in September.

"There is no reason to change our assessment that the nation's industrial production activity is in a rising trend," said an METI official.

Across Japan's industrial sectors, steel and autos showed the highest rate of growth in August, while the electronics and computer sectors saw slower growth.

Sales of electronics and computer-related products are however expected to accelerate ahead of the key Christmas and winter bonus shopping season, analysts said.

RECORD HURRICANE LOSSES PREDICTED

A recent spate of storms in the south-eastern US could leave insurers facing their biggest ever hurricane damages bill, an industry body has said.

Insured losses could reach $21.7bn (12bn), according to the Insurance Information Institute, breaking the record set by Hurricane Andrew in 1992.

The insurance industry had to pay out $15.5bn, or $20bn in current values, to repair the damage caused by Andrew.

The Caribbean and southern US have been hit by four storms since mid-August.

The most recent, Hurricane Jeanne, killed six people and left up to two million without electricity when it swept through Florida at the weekend.

 

 

INDIA'S ECONOMY CONTINUES TO GROW

India's economy has grown by 7.4% in the first quarter of the financial year April to June.

The performance, which is better than expected, is said to have been driven by a good showing in manufacturing and service industries.

That has helped offset a relatively poor performance in the agricultural sector of the economy.

Analysts say an improvement in agriculture is crucial to sustaining the momentum for growth.

Agriculture accounts for nearly a quarter of India's economy with more than half its one billion population engaged in it.

KYOTO 'WON'T HIT' RUSSIAN ECONOMY

Russian economic growth is unlikely to suffer because of government support for the Kyoto Protocol on climate change, a leading analyst has said.

Some economic advisers had warned that Russia could face economic crisis if it had to cut greenhouse gas emissions.

But Russia has to cut emissions from levels set at the height of Soviet output, Dafne Ter-Sakarian, of the Economist Intelligence Unit, said.

This makes it unlikely that Kyoto will hurt the economy in the short term.

STRIKE HITS SA PLATINUM PRODUCER

Workers at the world's second-largest platinum producer, South Africa's Impala, have gone on strike, stopping production at its largest mine.

About 17,000 employees failed to turn up for work on Sept 30 at Impala Platinum's mining and processing centre eighty miles north of Johannesburg.

The dispute centres on the terms of a two-year wage deal and talks should resume further.

Impala said the walk-out would cost it 28m rand (2.4m) a day.

INDIA REJECTS FOREIGN ECONOMISTS

A top Indian government body that prepares the country's economic blueprints has decided to drop foreign experts from its advisory groups.

It had earlier invited experts from organisations such as the World Bank, the Asian Development Bank and management consultants McKinsey.

But following strong opposition from communists, India's Planning Commission has decided to drop the idea. Communist parties are the biggest ally of India's new Congress-led government.

SPORTS MARKETING FIRM IMG BOUGHT

US buyout firm Forstmann Little is to buy giant sports and lifestyle management company IMG.

The firm is being acquired from trusts set up by IMG founder, Mark McCormack, who died in May 2003, and from the family of IMG vice-chair Arthur Lafave.

IBM IN $320M PENSION SETTLEMENT

Computer giant IBM has agreed a $320m deal with older staff, who had argued that changes to its pension scheme left them worse off.

The deal, which caps the firm's future liability at $1.7bn, must still be approved by a US court. IBM had earlier feared the pensions dispute could cost it up to $6.5bn.

GET REAL ON AFRICA, URGES BONO

Bono, lead singer with the Irish rock band U2, has urged Labour to "get real" and deal with the problems of world poverty and the Aids crisis.

Tony Blair and Gordon Brown were the John Lennon and Paul McCartney of the global development stage, he said praising their achievements.

But he urged the pair to "finish what they started" and end world poverty.

Britain had a real chance to effect change when it took up the G8 presidency next year, he said.

If a rich country "with the reins of power in its hands" could not lead the fight against world poverty then critics who called him "Labour's apologist" would be right, he said.

CONOCOPHILLIPS BUYS LUKOIL STAKE

US oil giant ConocoPhillips has bought a 7.6% stake in Russia's Lukoil from the Russian state.

ConocoPhillips clinched the deal after other potential buyers failed to match its $1.98bn (1.1bn) bid in a government auction.

SRI LANKAN GOVERNMENT UPS PRICES

Sri Lanka has raised bus fares, energy and food prices, amid a hike in diesel costs, according to AFP news agency.

The price rises also follow a worse-than-expected balance of payments deficit, the agency reports.

Last week, more than 1,000 opposition activists took to the streets of Sri Lanka's capital, Colombo, to protest at the rising cost of living.

Private bus operators will be allowed to increase fares by up to 16% to offset the 19% rise in diesel costs.

MMO2 LIFTS REVENUE TARGET FOR UK

Strong growth in UK customer numbers at mmo2 has enabled the mobile operator to raise its UK revenue growth forecast.

In a trading update, mmo2 said it now expected UK revenue to grow by 9-12% in the year to the end of March, compared with a previous forecast of 7-10%.

The rise comes despite regulators forcing it and other mobile firms to cut connection fees for calls from landlines by about 30%.

H&M PROFITS RISE ON US POPULARITY

Profits at Swedish fashion retailer Hennes & Mauritz rose more than expected in the third quarter as its clothes sold well in the US.

The company made a pre-tax profit of 2.45bn crowns ($333.2m;185m) in the June-to-August quarter, up from 2bn crowns for the same period in 2003.

CHEVRON DENIES KAZAKH TAX CLAIM

ChevronTexaco has denied it is facing a $2.5bn (1.4bn) claim for back-taxes over its Tengizchevroil (TCO) venture in Kazakhstan.

An official from Chevron's Russian partner Lukoil had previously said TCO owed money.

CUBA TO SHUT PLANTS TO SAVE POWER

Cuba plans to close more than 100 factories for all of October as part of a plan to deal with power shortages.

Other measures to save energy include a shorter working week, reduced street lighting and scheduled power cuts.

The power shortages have caused a range of problems affecting the flow of drinking water in homes and causing fridges and freezers to stop working.

STRIKE HALTS ASSAM TEA PRODUCTION

A strike by tea plantation workers in India's north-eastern state of Assam has brought work in about 800 tea gardens to a halt.

Tea worker leaders called the one-day strike to fight for better health care and greater financial incentives.

They say 600 workers have died in the past three months due to diseases like gastroenteritis and malaria.

India's tea industry, the world's biggest, faces a crisis with falling prices, exports and consumption.

MORTGAGE LENDING AT 12-MONTH LOW

Mortgage lending slowed to its lowest level in a year in August, figures from the Bank of England have shown.

Total mortgage advances were 25.14bn ($45bn), but net lending which strips out repayments eased to 8.38bn, the lowest level since August 2003.

The figures suggest consumers are becoming increasingly wary about taking on fresh mortgage debt.

Net consumer credit which covers other loans and cards was up slightly at 1.9bn in August.

FAIR TRADE PROTEST TARGETS LABOUR

Thousands of people took part in a protest outside the Labour Party conference in Brighton to highlight inequality in world trade.

The Trade Justice Movement (TJM) organised rally, which was a Latin American-style protest with pots, pans, whistles and drums.

The protest launches TJM's new campaign called Vote For Trade Justice.

Protesters were asked to cast a vote at giant ballot boxes on the beach in support of fairer international trade.

WE'VE MUCH MORE TO DO, SAYS BROWN

Gordon Brown has told the Labour faithful the party can create a Britain that leads the world by being both prosperous and socially just.

They must move beyond winning votes to winning hearts and minds, to create a "progressive consensus" around "liberty, duty and fairness", he said.

His Brighton speech turned the focus back on the economy, away from Iraq.

Mr Brown told delegates they must have confidence in Labour's values, saying: "We have much more to do."

GOLD SCORES NEW HIGH IN EUROPE, SILVER UP

Gold scaled new five-and-a-half month peaks in Europe, moving above $417 an ounce as funds seized on a struggling dollar to extend their positions in bullion, dealers said.

Silver responded strongly as funds spread their purchases, with the industrial and precious metal moving to levels last seen five weeks ago around $6.90.

Spot gold stood at $416.55/$417.00 by 1050 GMT after peaking at $417.45, its highest since April 13 and compared with $412.65/$413.40 quoted late in New York on Wednesday.

Funds first took gold to new peaks as the euro rebounded against the dollar and nudged currencies back into focus as the market's major influence after high oil prices led nervy investors toward safe-haven bullion earlier this week.