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3 DAYS FORECAST
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KARACHI
Today 12 26 38 Sunny
Tomorrow 11 27 38 Sunny
Day after 11 28 38 Sunny
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Today 1 20 87 Sunny
Tomorrow 2 20 87 Sunny
Day after 2 21 87 Sunny
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Today 0 18 59 Sunny
Tomorrow 0 18 59 Sunny
Day after 0 21 59 Sunny
HUM%: Humidity In %
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updated: Fri - Sun 23-25 Dec, 2005

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KARACHI         - 021 LAHORE          - 042 ISLAMABAD    - 051 FAISALABAD   - 041 MULTAN          - 061 PESHAWAR    - 0521 CANADA          - 1 KUWAIT           - 965 INDIA               - 91 IRAN                - 98 U.K                   - 44 U.A.E                - 971 U.S.A                - 1

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  DEPARTMENTS
 

IN THE NEWS
. INTERNATIONAL
. PAKISTAN
 

 

 

 

 
  INTERNATIONAL

Oct 24 - 30, 2005

CHINA'S ECONOMIC BOOM CONTINUES

China's economy grew strongly in the first nine months of the year, despite efforts by the government to put the brakes on growth.

The National Bureau of Statistics said the economy was 9.4% bigger than a year ago, but said that trade imbalances threatened economic stability.

The government is encouraging domestic demand, while trying to reducing reliance on investment and exports.

It also has concerns about agriculture, and high levels of government spending.

It was the ninth straight quarter of annual growth of 9% or higher, and followed rises of 9.5% in the second quarter and 9.4% in the first.

National Bureau of Statistics spokesman Zheng Jingping said: "The nation's economy has continued to develop towards the target of macro-regulation as a good momentum of steady and rapid growth is maintained."

We are concerned the overheating fixed asset investment has still not yet been effectively controlled

Total GDP for the nine months from January to September grew to total 10.627 trillion yuan ($1.3tr; 738bn).

The government has attempted to slow the economy by putting interest rates up, revaluing the yuan, and restricting credit levels.

It is also trying to limit investment in industries such as steel, cement and aluminium, but high-tech industries are still investing heavily.

There are have been growing concerns about an economic imbalance between urban and rural prosperity and investment, with many people moving from the countryside to the city.

The latest economic report acknowledged that Chinese farmers' incomes are not growing fast enough.

US 'STILL GREW AFTER HURRICANES'

The US economy has kept growing despite the negative effects of hurricanes Katrina and Rita, and surging oil prices, the Federal Reserve has said.

In its Beige Book survey, the Fed said that economic activity continued in September and into early October.

While the hurricanes have not slowed growth, they have had an impact.

The Fed said that its 12 regional banking regions reported an increase energy and fuel costs, some of which were being passed on to consumers.

"All districts reported cost increases for energy, petroleum-based products, building materials, and shipping," the Fed said.

Analysts said that it was likely that the Fed would continue with its steady increases to borrowing costs.

US interest rates have risen to 3.75% from 1% as the economy has improved and the rate of inflation has come under pressure.

The damage from hurricanes will pressure prices in coming months

While the economy is still expanding, the Fed said that growth is gradual or moderate, with some regions experiencing more problems than others.

The Atlanta and Dallas districts, which contain areas hit by the hurricanes, saw a slowdown in growth.

Within Atlanta, "economic activity remained severely disrupted in costal Louisiana and Mississippi", the Fed said.

Dallas includes the coast of Texas and northern Louisiana.

There also was a slowdown in New York.

The housing market remained generally strong, while retail sales growth was weaker than usually in a number of districts. Car sales also dipped.

TOURISM 'BOOSTS UK ECONOMY BY 81BN'

The UK economy benefited from tourism to the tune of 81.5bn in 2004, says the British Hospitality Association.

The trade association for restaurants, hotels and caterers said eating and drinking away from the home formed the majority of the leisure earnings.

The first was worth 20.1bn and the latter 15.9bn. Business-related spending was valued at 10.2bn and overnight accommodation at 9.9bn.

The London Eye was the top charging attraction with 3.7 million visitors.

The BHA report, supported by American Express and research company Horizons, also revealed more than 110 hotels will have opened in the UK between September 2004 and December 2005.

And the London bombings in July do not seem to have an adverse effect on numbers.

US BUDGET DEFICIT SHRINKS IN 2005

The US budget deficit shrank to $319bn (180bn) last year as better economic conditions boosted tax revenues.

Despite falling from 2004's record $412bn figure, the federal deficit for the fiscal year ending last month was still the third highest on record.

US Treasury Secretary John Snow hailed the fall, which was larger than had been projected, as "encouraging news".

However, this year's deficit is likely to be swelled by $30bn of spending on post-Hurricane Katrina reconstruction.

According to figures from the US Treasury Department, only $4bn of the $62bn allocated by Congress in emergency aid for Hurricane Katrina was spent in the last fiscal year.

When it reconvenes, the House of Representatives will begin the task of identifying $35bn worth of cuts to federal spending needed to offset hurricane recovery costs.

The 2005 fiscal year deficit amounted to 2.6% of GDP, below the 3.6% recorded in 2004 and the post World War Two high of 6% in 1983.

DOLLAR OFF GAINS ON EU INDUSTRY REPORT

The dollar soared against the euro and the yen on Wednesday last but profit-taking and a stronger than expected report on industrial performance in the eurozone wiped out much of the gain.

The single European currency at one point fell below the 1.19-dollar level for the first time since early July, dropping to $1.1876, before rebounding strongly.

Against the yen the dollar jumped to 115.99, its highest level since September 2003.

The euro in later trade was at $1.1987, against $1.1957 late Tuesday in New York and 115.50 yen after 115.67 on Tuesday.

FUEL BILL

American Airlines expects to pay $2.17 per gallon of jet fuel in 2006, which would mean a $1.1bn increase in its fuel bill next year compared with its forecast 2005 total, its chief financial officer said on Wednesday. James Beer also said the AMR Corp unit expects consolidated capacity to edge up 0.8pc in the 4th quarter, while the number of available seats would be "relatively flat" next year.

ABBAS TO MEET BUSH AT WHITE HOUSE

US President George W Bush is due to meet Palestinian leader Mahmoud Abbas, amid worsened relations between the Palestinians and the Israelis.

Mr Bush is expected to ask Mr Abbas to do more to halt violence against Israel after an attack on settlers on Sunday.

Mr Abbas is expected to ask the US to put pressure on Jerusalem to dismantle settlements not authorised by Israel and to allow a free Palestinian poll. Their White House talks are the first since Israel left Gaza last month.

IRAQ PROMISES OIL EXPORT GROWTH

Iraq is on course for a 20% rise in its oil exports by the start of 2006, the head of its energy council says.

Ahmad Chalabi said output for export should hit 1.8 million barrels a day by January, when elections take place and a new administration takes power.

Talking to Reuters, he backed the idea that US and UK oil firms should have priority in Iraq's oil sector.

Mr Chalabi, once a US favourite to lead Iraq before falling out with Washington DC, is now a key government figure.

Previous optimistic forecasts of growth in oil production and export have frequently proved over-optimistic.

The shortfalls are the product of problems with equipment after years of neglect, and the impact of an insurgency which frequently targets both oil installations and the industry's workers.

OIL PRICES DOWN ON WILMA APPROACH

Oil fell below $62 a barrel in early Asian trading on Thursday last, after a day of fluctuating prices as Hurricane Wilma approached the US.

Market sentiment changed as Wilma appeared to be heading towards Florida rather than the Gulf Of Mexico, where two previous hurricanes hit output.

Growing US crude and petrol inventories and signs of weakening demand also contributed to the price fall.

US light crude futures slid 43 cents, or 0.7%, to $61.98 a barrel.

Oil prices soared above $70 a barrel in August, but have been fluctuating around the mid-sixties since then.

The market has been on a three-day falling run, shedding 3.7% a barrel during that time. Early on Thursday a barrel of London Brent crude was also down, by 33 cents to $58.27.

PARIS CLUB AGREES NIGERIA DEBT DEAL

The Paris Club of creditor nations has agreed a debt relief deal with Nigeria worth $18bn (10bn).

The club said it was impressed by an economic programme implemented by Nigerian authorities since 2003.

The deal will see Nigeria pay a chunk of its debt arrears, receive debt relief on two-thirds of eligible debts and buy back the last third.

About $30bn of Nigeria's debt is owed to members of the 19-nation-strong Paris Club.

eBAY PROFIT

Online auction site eBay has reported a 40% rise in quarterly profits, helped by increasing sales in Europe and Asia.

Net income in the third quarter ending 30 September was $255m (144.7m) from $182.3m a year earlier. International sales increased 43% to $408.9m.

EUROTUNNEL

The battle to keep fares lower in the face of competition from airlines and ferry operators has hit Eurotunnel's cross-channel passenger business.

Revenues slipped at its passenger shuttle division in the third quarter, though the actual number of passengers travelling increased.

US BANKS BUOYED BY BETTER TRADING

US bank earnings have received a boost from better performance in stock, bond and commodity trading, as well as a spate of mergers and acquisitions.

JP Morgan and Merrill Lynch have reported record quarterly profits, with Bank of America seeing a solid rise. Banking giant Citigroup also released good earnings news earlier this week.

INTEL PROFIT

Chipmaking giant Intel, a bellwether for the technology and computer industry, said that third quarter profits rose, lifted by steady demand.

Net income rose 5% to $2bn (1.1bn) in the three months ending 1 October, from $1.91bn a year earlier. Sales during the period rose 18% to $9.96bn.

ARCADIA PROFITS

Entrepreneur Philip Green's Arcadia Group has posted a small rise in annual profits as conditions on the High Street continue to challenge retailers.

Pre-tax profits at the privately held group rose to 252.79m, compared to profits of 246.33m last year. .

BROWN 'ON THIN ICE WITH ECONOMY'

Chancellor Gordon Brown is skating on thin ice when it comes to the economy, a leading forecasting group has warned.

The Ernst and Young Item Club - which uses the Treasury's own economic model to gauge the UK economy - says it will only grow at 1.6% this year.

In the last Budget, the chancellor had predicted growth of 3% to 3.5%.

The group added that Mr Brown had failed to heed signs of a slowdown, and could not blame external factors such as rising oil prices for the problem.

"The chancellor is blaming the UK economic slowdown on the recent spike in oil prices and the weakness of the European economy, but this is unrealistic," the Item Club's chief economic adviser Professor Peter Spencer said.

US WHOLESALE PRICES JUMP ON OIL

US inflation worries have been stoked up after wholesale prices posted their biggest monthly gain in 15 years.

The producer price index jumped by 1.9% in September from a year earlier, the US Labor Department said. Analysts had expected a figure closer to 1.1%.

Stocks and bonds fell on the news amid concerns that corporate profit growth will slow and interest rates will rise. Consumer prices are rising by 4.7% annually on higher fuel and food costs.

ENERGY PRICES STOKE US INFLATION

Inflation in the US shot up in September as food and fuel prices took their toll on household budgets.

Prices surged 1.2% last month - more steeply than expected - bringing the rate for the past 12 months to 4.7%.

But leaving out food and fuel - and thus the recent increases in petrol and heating oil following Hurricane Katrina - inflation was just 0.1%.

President George W Bush's spokesman said he was confident that the Federal Reserve could handle inflation fears.

The surging inflation rate has been caused by a supply bottleneck for energy in the US, after a huge slice of US refinery capacity was put out of action by hurricanes Katrina and Rita.

 
 

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