Russian economy gaining momentum on rising oil prices.

The impact of higher oil prices recirculating throughout the economy is likely to further support domestic demand and thus GDP which is expected to grow by 1.7% in 2018, the European Commission stated in its recent forecast.

The commission expects the growth rate to fall to 1.6% of GDP, reflecting the long-term consequences of Western sanctions.

“Growth is expected to edge down slightly to 1.6% in the outer of the forecast horizon, reflecting subdued productivity growth and lingering effects of sanctions.” European Commission said.

Oil has significantly strengthened in the last week, with Brent benchmark rising above $70 for first time since 2014. It was trading near the $73 per barrel mark, while the US West Texas Intermediate was slipped below $68.

According to Russia Today, real wages in Russia are growing after three years of declines with indexation of public employees’ salaries.

“Uncertainties surrounding the geopolitical situation and the impact of the recent US sanctions of investors’ confidence remain the key downside risk facing the economic outlook for Russia, while higher oil prices and stronger wage growth are the major risks for growth outlook,”the European Commission said. 

The EC forecasts inflation in Russia to be 3.7% this year, and 4% in 2019, which corresponds with the target of the Central Bank.


President Cyril Ramaphosa at the Japan-Africa Public-Private Economic Forum

Africa is striving to achieve reasonable and inclusive social and economic development to fight poverty, unemployment and under-development, says President Cyril Ramaphosa,  speaking at the Japan-Africa Economic Forum in Sandton, Johannesburg.

This annual event provides opportunities for Japanese and African business leaders to highlight their work in Africa, and other opportunities to enhance business partnership.

President Ramaphosa wishes that the forum will enable new ground in further advancing the relationship between the countries in Africa and Japan.

“This forum is about cooperation and collaboration, not only different countries, but also between the public and private sectors in those countries.”

He also stated that social and economic challenges on the African continent needs the government and corporate sectors to work together to address them.

“Similarly, we will not be able to expand trade and investment relations between Japan and African countries unless our respective governments, state owned entities and other public institutions are aligned with the work of the private sector.”

Ramaphosa declares that for Africa to grow and its people to prosper, economies need to be more effectively integrated into global economy.

“They need to attract capital, technology, expertise and best practice from advanced economies and use that to take full advantage of its plentiful natural resources.” He said.

Trade ties between Africa and Asia have grown significantly in recent years. In 2007, Africa’s exports to Asia were worth around $64 billion and Japan is accounted for around $8.3.

“However, the current basket of exports is very much commodity-based, exposing African countries to price fluctuations and denying them the opportunity to extract additional value from commodities.

“African economies therefore need to diversify and shift towards greater production of intermediate and final consumer and industrial products.” Ramaphosa said.

He also said African countries need to ensure that their manufacturing capabilities feed into regional and global value chains.

“As it stands, Africa is the second fastest growing region in the world and has the largest number of developing countries.”

Ramaphosa stated that in the past decade Africa has grown at a rate of 2 to 3 % points faster than global GDP.

African countries now require some fundamental changes of approaches to job creation and skill development to a renewed focus on the continent’s economic capability.




Rural purchases to boost Indian gold demand through December

The World Gold Council (WGC) has indicated that India’s gold demand may improve through to December because of positive rainy season and government efforts to raise farmers incomes.

According to Reuters, India is the world’s second-biggest gold consumer and higher demand there could support global prices XAU= that have risen over 5% since mid-December, while a rise in imports of the metal would widen India’s trade shortfall.

Somasundaram PR, who is the managing director of WGC’s Indian operations, has said that the government’s measures to boost rural incomes by increasing the subsidized prices for food grains and the forecast for a normal monsoon rains this year will strengthen demand.

“The aggregate demand in April to December would be higher than last year’s three quarters,” he said.

India’s gold consumption this year is likely to be between 700 and 800 tonnes versus 737.5 tonnes last year, Somasundaram said. Indian demand has averaged 840 tonnes over the last 10 years.

A majority of India’s gold demand comes from rural areas where jewellery is a traditional store of wealth.

India Meteorological Department noted that the country is likely to receive average monsoon rains this year, possibly raising farm and economic growth in Asia’s third-biggest economy.



Russia plans to draw up a draft law to raise the pension age

Russian Prime Minister, Dmitry Medvedev has stated that Russia will soon draw up a draft law to raise the pension age, while carefully looking for ways to avoid disrupting the existing pension system or causing social tensions.

“We are on the brink of starting to discuss this at a legislative level, it (a decision) will be taken based on different factors, it will be done carefully, and in such a way that will not unbalance the pension system or, on the other hand, create negative feelings among people.” Medvedev said.

Former finance minister Alexei Kudrin – now an unofficial adviser to President Vladimir Putin -said that Russia is currently faces a big increase in the number of pensioners in coming years which will coincide with a shrinking workforce.

According to Reuters, any increase in the pension age would allow the government to cut contributions from the state budget, which could help fund pre-election promises of higher social and infrastructure spending by Putin, who starts a new term in office on 7 May.

Russia would see the pension age increased every year by one year until it reaches 65 years for both men and women. While there would increase the retirement age for women by six months every year until it reaches 63 years, and by four months each year for men until it reaches 65 years.

Source: Reuters


Indian youth learn Chinese to access job opportunities

A number of Indian young people have chosen to learn Chinese/ Mandarin to gain access to greater job opportunities in Chinese-funded enterprises, as more and more Chinese enterprises flock to India to conduct business.

Student Heena Nakhwa feels that learning to speak Chinese was the turning point of her life.

In 2015, she successfully got a government scholarship to learn Chinese, which landed her a job in  the sales team of Air China BOM.

“Now I have become financially stable, more responsible. I have learnt a foreign language (Chinese) and have also encouraged my friends to learn. I won people’s respect and it makes my parents proud.”

Nakhwa says she experienced the new trend of “Chinese fever” in India at the Indo Sino Bridge in the University of Mumbai, where there are events that showcase Indians and Chinese singing, dancing, reading poetry and other art performances.

Professor Dibo Jie, or BR Deepak, from the Center of Chinese and Southeast Asian Studies at Jawaharlal Nehru University in New Delhi, says that learning to speak Chinese in India has become a common practice.

“Chinese is one of the working languages of the United Nations, and is the most used language in the world, with the continued expansion of Chinese economic and political influence, prompting countries to learn Chinese, India is no exception,” he said.

He believes that the current “Chinese fever” is the significant growth in trade between China and India, and it has brought several jobs. To add, the the development of tourism between the two countries has also stimulated the development of Chinese learning in India.

According to official figures from the Chinese Ministry of Commerce, China’s trade with India reached a record high of 84.4 billion U.S. dollars in 2017, up 20.3% from the previous year. China remains India’s largest trading partner.

Chinese companies have invested more than 8 billion dollars in real investment, and Indian companies have increased their investment in China by an average of 18.5% over the past three years.


Exciting prospects for trade relationship between SA and India

Expert, diplomats and speakers from India and South Africa came together in Johannesburg for the India-South Africa Business Summit 2018, where they discussed ways to expand trade relationships between the two countries.

India’s Commerce and Industry Minister, Suresh Prabhu believes that great potential exists between the two regions.

A meeting was held in New Delhi just a month earlier, to explore trade possibilities.

Says Prabhu: “We realised that some of these countries have so much capability which we were not aware of, so we can actually use that and bring it into India as well.”

“We are preparing for each and every country what it is that we can do together. We don’t want to offer one single solution to all the countries, but something befitting each of the countries in the southern African region.”

Prabhu added that India’s commitment to trade relations with Africa is “very strong” and efforts are on to find out how the credit extended for project financing in some of these countries can be further improved.

South African Minister of Trade and Industry, Rob Davies detailed that South Africa has a strategic relationship with India.

“Our bilateral trade is growing and has increased from R68 million in 2012 to R107 million in 2018. Investment has also grown seeing 130 Indian firms investing in South Africa and 29 South African FDIs in India for R10 billion.”




[WATCH] BRICS Journal TV: Word on the Street (Rates & Tax Increase)

In the delivery of his 2018 budget speech, former Minister of Finance, Malusi Gigaba announced an increase in value-added tax (VAT), fuel levy and a higher estate duty tax.

We took to the streets to find out how people will make the necessary adjustments to their personal finance.

Oil demand growth in China is set to slow down through 2023

A recent report conducted by the International Energy Agency (IEA) states that as China’s economy becomes more consumer-oriented, the rate of growth in oil demand is expected to slow down through 2023.

The head of the oil industry and markets division at the IEA, Niel Atkinson said factors that need to be considered include better efficiency, the fast development of electric vehicles and the restructuring of the energy mix, the growth rate of oil demand in China will gradually slow down during the next six years.

Atkinson was speaking at the China Launch of the IEA Market Report Series: Oil 2018 that was held in Beijing.

China has become the world’s biggest electric vehicle market with the help of subsidies in only a few years. IEA has released figures that show China saw 336,00 new electric car registrations in 2016.

“Other clean energy substitutes, including liquefied natural gas, have also replaced consumption of petroleum and diesel in the country,” Atkinson said.

The IEA report showed that there are signs of substitution of oil by other energy sources in various countries with China being a prime example, which has some of the world’s most stringent fuel efficiency and emissions regulations.

“As the country recognises the urgent need to tackle poor air quality in cities, efforts are intensifying, with sales of electric vehicles rising and a strong growth in the deployment of natural gas vehicles, particularly into fleets of trucks and buses. A rising number of electric buses and LNG-fuelled trucks in China will significantly slow gas and oil demand growth,” the report said.

The report also revealed that in the upcoming six years, petrochemicals will be a key driver of oil demand growth. The fastest-growing source of global oil demand growth is petrochemicals, particularly in the United States and China.

Another research organisation called Bloomberg New Energy Finance said in their latest report that China is expected to invest $3 trillion in power generation over the next 25 years, with some 75% of the investment expected to be into the renewable energy sector.



South Africa’s key economic sector

A wealth of mineral resources and favourable agricultural conditions have helped grow South Africa’s economy. Here are some of the key sectors that contribute to the country’s gross domestic product:

Mining and minerals –  The sector is critical to the country’s socio-economic development as it contributes significantly to economic activity, job creation and foreign exchange earnings. Last year, mining contributed about 8% to the GDP. South Africa is world-renowned for its mining sector, with an abundance of mineral resources, accounting for a significant proportion of world production and reserves with an estimated worth of R20.3 trillion (US$2.5 trillion).

Financial sector – South Africa’s financial services sector claims dozens of domestic and foreign institutions that provides services such as commercial, retail and merchant banking, mortgage lending, insurance and investment. Many foreign banks and investment institutions have set up operations in South Africa over the past decade. Electronic banking facilities are extensive, with a nationwide network of ATMs and internet banking facilities available.

The manufacturing sector – The sector has accounted for 13% of South Africa’s GDP (as at Q3 2017). For every R1 invested in manufacturing, there is R1.13 of value addition to the South African economy. Manufacturing is dominated by industries such as automotive, chemicals, information and communication technology, electronics, metals, textiles, clothing and footwear. This shows that the country has developed a diversified manufacturing base that has shown the significantly accelerate the country’s growth and development.

Agriculture –  Farming remains vitally important to South Africa’s economy. It is estimated that about 8.5 million people are directly or indirectly dependent on agriculture for their employment and income. The country has well-developed commercial farming and more subsistence-based production in the deep rural areas.

Travel and tourism – South Africa continues to focus on business tourism as an area with significant growth potential. The country is among the top 15 long-haul business events destinations globally and is the premier business events destination in Africa. The sector grips the potential to drive increases in export earnings in a trading environment that is generally less volatile than that of commodity exports.


Poll reveals: India boasts top spot for major economic growth

A recent poll conducted by Reuters economists predicts that India is most likely boast the world’s fastest-growing major economy this year. There are however, factors like the rising trade tensions between the United States and China may restrain that growth.

The poll was taken 11-18 April this year and has predicted that India’s economy will expand by 7.4% in the fiscal year that began this month. After growth slowed sharply for much of 2017, India regained its status as the world’s fastest-growing major economy in the quarter ending December 2017.

According to Reuters, the recent “tit-for-tat import tariffs imposed by the U.S. and China” are a cause of concern about a looming full-fledged global trade war which could affect the status of the world economy.

Twenty nine economists believe that India’s economy is in danger of being directly affected by the ongoing trade dispute.

“India runs the risk of being caught in the middle of the trade spat between the U.S. and China,” said Hugo Erken, senior economist at Rabobank.

“The damage would especially be large if India retaliated with an import duty on either U.S. or Chinese imports,” said Erken, adding that such a scenario was unlikely.

However, not all economists shared that view. Nine respondents are of the belief that India’s economy would in fact, benefit from the dispute.

“Though in the short-term a trade war between U.S. and China may impact global trade including India, in the long-term, India is likely to benefit as China will be forced to devaluate its currency to remain a dominant player in the world market,” wrote RK Gupta, managing director at Taurus Asset Management.

“In that scenario, India’s exports will be more competitive with China.”

Source :Reuters