Germany has been reliant on exports to get its
economy back on track, as unemployment of more than five million and
impending cuts to welfare mean German consumers have kept their money
Major companies including Volkswagen,
DaimlerChrysler and Siemens have spent much of 2004 in tough talks
with unions about trimming jobs and costs.
According to the statistics office, Destatis,
rising exports were outweighed in the fourth quarter by the continuing
weakness of domestic demand.
But the relentless rise in the value of the euro
last year has also hit the competitiveness of German products
The effect has been to depress prospects for the
12-nation eurozone as a whole, as well as Germany.
Eurozone interest rates are at 2%, but senior
officials at the rate-setting European Central Bank are beginning to
talk about the threat of inflation, prompting fears that interest
rates may rise.
The ECB's mandate is to fight rising prices by
boosting interest rates — and that could further threaten Germany's
hopes of recovery.
JAPAN ECONOMY SLIDES TO RECESSION
The Japanese economy has officially gone back into
recession for the fourth time in a decade. Gross domestic product fell
by 0.1% in the last three months of 2004.
The fall reflects weak exports and a slowdown in
consumer spending, and follows similar falls in GDP in the two
The Tokyo stock market fell after the figures were
announced and the Nikkei share index closed trading down 44.81 points,
or 0.38%, at 11,601.68.
The government revised growth figures from earlier
in 2004 which, when taking into account performance in the most recent
period, effectively tips Japan into recession.
A previous estimate of 0.1% growth between July and
September was downgraded to a 0.3% decline.
A recession is commonly defined as two consecutive
quarters of negative growth, although the Japanese government takes
other factors into account when judging the status of its economy.
Figures released by the government's Cabinet Office
showed that GDP, on an annualised basis, fell 0.5% in the last three
months of 2004.
However, politicians remain upbeat about prospects
for an economic boost later in the year.
"The economy has some soft patches but if you
look at the bigger picture, it is in a recovery stage," said
Economic and Fiscal Policy Minister Heizo Takenaka.
Gross domestic product measures the overall value
of goods and services produced in a country.
"The economy must be assessed comprehensively
and we cannot look at GDP alone," Takenaka stressed.
CHINA CONSUMES MOST
China has overtaken the United States in the
consumption of basic agricultural and industrial goods, a new survey
It is now the world's biggest consumer of grain,
meat, coal and steel. Only in oil does the US consume more.
China is well ahead of the US in the consumption of
goods such as television sets, refrigerators and mobile phones.
The Washington-based Earth Policy Institute says
that China is now an emerging economic superpower.
However, per capita consumption in China, the
world's most populous country, remains far below that of the US.
According to the report: 64m tonnes of meat were
consumed in China in 2004 compared to 38m tonnes in the US 258m tonnes
of steel were used in China in 2003 compared to 104m in the US.
China's factories and homes burned 40% more coal
than in the US. The number of PCs in China is doubling every 28
The latest official figures for the Chinese
economy, the sixth-largest in the world, show that it is growing even
faster than expected.
UK ENJOYS SERVICES TRADE SURPLUS
The UK was the world's second largest exporter and
third largest importer of services in 2003, according to the Office
for National Statistics. Its latest annual figures for the services
sectors, show that exports grew by 4.5% to £91bn in 2003, while
imports rose 5.4% to £76bn. This created a surplus of £15.6bn
($29.4bn), unchanged from 2002.
The US is both the world's largest exporter and
importer of services, followed by the UK and Germany.
Britain's services exports have now more than
doubled since 1993 when sales totalled £41bn.
In 2003, the UK recorded a services surplus with
every continent except Europe, where there was a deficit of £1.8bn,
up from £1.2bn in 2002. Its surplus with the Americas was £10.2bn.
This included a £8.6bn surplus with the United
States, which alone represented 55% of the UK's total surplus.
MIXED SIGNALS FROM FRENCH ECONOMY
The French economy picked up speed at the end of
2004, official figures show — but still looks set to have fallen
short of the government's hopes.
According to state statistics body INSEE, growth
for the three months to December was a seasonally-adjusted 0.7-0.8%,
ahead of the 0.6% forecast.
If confirmed, that would be the best quarterly
showing since early 2002. It leaves GDP up 2.3% for the full year, but
short of the 2.5% which the French government had predicted.
RECORD YEAR FOR TOURISM IN MEXICO
Mexico's tourism industry had a record year in
2004, with visitor numbers up 10%, the Mexican government has said.
Tourism Secretary Rodolfo Elizondo said 20.6
million foreigners visited the country, spending $10.83bn (£5.73bn).
The dollar's relative strength against the peso
made the country good value for US tourists while its fall against the
euro had made Europe costlier.
The perception of Mexico as a safe destination also
helped the country attract US tourists, analysts said.
Europe was weakened in its competition for US
tourists because of the euro's strength and the perception of some
that it was more dangerous, they said. Oil, remittances and tourism
are Mexico's main sources of income.
QANTAS SEES PROFITS
Australian airline Qantas has posted a record
fiscal first-half profit thanks to cost cutting measures.
Net profit in the six months ending 31 December
jumped 28% to A$458.4m ($357.6m) from a year earlier. Analysts
expected a figure closer to A$431m.
HP'S PROFITS UP ACROSS
Hewlett-Packard has reported a slim rise in
profits, after increased sales across all of its businesses.
The firm, which last week parted with chief
executive Carly Fiorina, said net profits for the three months to 31
January were $943m (£500m).
GREENSPAN URGES CAUTIOUS GROWTH
Federal Reserve chairman Alan Greenspan has said
the US economy is continuing to grow in 2005, but warned there was no
room for complacency.
Speaking to the Senate Banking Committee, he said
future inflation must always be kept in check to prevent the economy
HYUNDAI TO BUILD NEW INDIA PLANT
South Korea's Hyundai Motor has announced that it
plans to build a second plant in India to meet the country's growing
demand for cars.
The company didn't give details of its investment
but it said the new plant would produce 150,000 cars a year.
This will boost the annual production capacity of
the company — India's second-largest car manufacturer — to 400,000
units. Hyundai expects its sales in India to grow 16% to 250,000 in
Coca-Cola has said it is disappointed with last
year's performance. During the three months to 31 December it made
profits of $1.2bn (£640m), up from $927m a year earlier.
UK INFLATION 'ON TARGET' FOR 2006
UK inflation is likely to hit its 2.0% target in
2006 before heading even higher, the Bank of England has said.
Some experts said the Bank's quarterly inflation
report suggested that rate rises could be needed later this year to
keep inflation under control.
The Bank said higher import prices and rising
demand were likely to push up inflation in coming months.
MOBILE FIRMS PLAN CHEAP HANDSET
An alliance of mobile phone firms has launched an
ultra-cheap handset in the hope of connecting millions more customers
in developing countries.
Motorola is to make the first device at a wholesale
price below $40 (£21), and aims to sell 6 million in six months.
The initiative comes from the GSM Association, 18
of whose member operators are behind the plan.
UK JOBLESS TOTAL ROSE
The UK's jobless total rose for the second month in
a row in December, official figures show.
The number of people out of work rose 32,000 to
1.41 million in the last three months of 2004, even as 90,000 more
people were in employment.
Average earnings rose by 4.3% in the year to
December up from November's 4.2%, the Office for National Statistics (ONS)
SONY ERICSSON LAUNCHES WALKMAN
Sony Ericsson has announced it will sell
music-playing mobiles under its Walkman brand and will work closely
with Sony Connect and Sony BMG, its music division, on content.
The company will unveil further details of its
Walkman mobile in March.
It made the announcement at the 3GSM World Congress
mobile phone trade fair held in the French town of Cannes.
Music by Sony BMG artist Natasha Bedingfield was
played over a phone connected to loudspeakers at the event.
CIRCUIT CITY GETS TAKEOVER OFFER
Circuit City Stores, the second-largest electronics
retailer in the US, has received a $3.25bn (£1.7bn) takeover offer.
The bid has come from Boston-based private
investment firm Highfields Capital Management, which already owns 6.7%
of Circuit City's shares.
EU AIMING TO FUEL DEVELOPMENT AID
European Union finance ministers meet to discuss
proposals, including a tax on jet fuel, to boost development aid for
The policy makers are to ask for a report into how
more development money can be raised, the EU said.
The world's richest countries have said they want
to increase the amount of aid they give to 0.7% of their annual gross
national income by 2015. Airlines have reacted strongly against the
proposed fuel levy.
WEAK DOLLAR HITS REUTERS REVENUES
Revenues at media group Reuters slipped 11% during
2004, mainly due to the weakness of the dollar, the group said.
The company said it was optimistic about growth
even as revenues slipped 11% from £3.24bn ($6.13bn) in 2003 to
£2.89bn in 2004.
Reuters beat profit forecasts, posting a 52% rise
in profits for the year to £198m from the £130m seen a year earlier.
BOEING UNVEILS 777
US aircraft firm Boeing has unveiled its new
long-distance 777 plane, as it tries to regain its position as the
industry's leading manufacturer.
The 777-200LR will be capable of flying almost
11,000 miles non-stop, linking cities such as London and Sydney.
Boeing, in contrast to European rival Airbus, hopes
airlines will want to fly smaller aircraft over longer distances.
Airbus, which overtook Boeing as the number one
civilian planemaker in 2003, is focusing on so-called super jumbos.
GM PAYS $2BN TO EVADE FIAT BUYOUT
General Motors of the US is to pay Fiat 1.55bn
euros ($2bn; £1.1bn) to get out of a deal which could have forced it
to buy the Italian car maker outright. Fiat had sold GM a stake in
2000, as part of a partnership agreement.
SMALL FIRMS 'HIT BY RISING COSTS'
Rising fuel and materials costs are hitting
confidence among the UK's small manufacturers despite a rise in
output, business lobby group the CBI said.
A CBI quarterly survey found output had risen by
the fastest rate in seven years but many firms were seeing the
benefits offset by increasing expenses. The CBI also found spending on
innovation, training and retraining is forecast to go up over the next
year. However, firms continue to scale back investment in buildings