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Strategies & Market Trends : World Outlook -- Ignore unavailable to you. Want to Upgrade?

To: Julius Wong who wrote (1730)	4/14/2003 11:24:40 PM
From: Don Green	Respond to of 49557

US trade deficit narrows Apr 10, 2003 WASHINGTON - The US trade deficit for goods and services narrowed to 40.3 billion dollars in February from a revised 41.2 billion in January, the Commerce Department said Thursday. Wall Street economists polled called for the deficit to widen to a seasonally adjusted 42.0 billion dollars in February. In January, the trade deficit was originally recorded as 41.1 billion dollars. "The trade deficit narrowed in February, though the level remains way too high," said independent economist Joel Naroff. "But as the war begins to wind down, the focus is once again on the real economy and thus there is some good news in this report. There was a small increase in exports and a minor decline in imports, both of which are welcomed news." The drop in imports could reflect some of the self-correcting effect of a falling dollar, which makes imports more expensive and US exports more competitive. US Treasury Secretary John Snow argued in a television interview that the big US deficits in trade and capital flows cited by global policymakers are no cause for alarm, saying they reflect US economic strength. Snow, interviewed on CNBC television, acknowledged that the US current account deficit - which reflects trade as well as capital flows - will likely be discussed at this weekend's meetings of the Group of Seven finance ministers and the International Monetary Fund and World Bank. Snow said the deficit reflects the slow growth rates in the rest of the world. "The fact that in so many parts of the world (economies) are stagnant (is) one subject I'd like to raise at the G7 meeting." He cited the need for "a compact on growth" for the global economy. "The world economy needs to grow faster, needs to create more opportunities for the citizens of the world. And as Europe, Japan and Asia grow faster, there will be more demand for US exports. The reason why we're not exporting more now is that so many economies in the word simply are not in a good enough shape to buy enough from America." The February trade deficit reflected a rise in exports and a drop in imports. Imports fell 0.5% to 122.77 billion dollars, while exports rose 0.5% to 82.45 billion. The decline in imports was led by capital goods and agricultural products. The goods-only trade deficit narrowed 2.0% to 43.15 billion dollars in February. In the services-only category, the surplus widened 4.6% to 3.90 billion. The February petroleum deficit widened 6.5% to 9.88 billion dollars. Excluding petroleum, the trade deficit narrowed 4.2 percent to 33.27 billion. The deficit with Japan narrowed to 5.32 billion dollars in February from 5.66 billion a year earlier. The deficit with Japan was 5.22 billion in January. The gap with China widened to 7.58 billion dollars in February from 6.50 billion in the same month one year ago. The deficit with China was 9.42 billion in January. The US trade deficit with the Newly Industrialized Countries (NICs) - Hong Kong, South Korea, Singapore, and Taiwan - narrowed to 794 million dollars in February compared with 1.82 billion in February 2002 and 2.78 billion in January. The deficit with the euro area widened to 4.81 billion dollars in February from 3.92 billion in the same month last year. In January, the deficit with the euro area was 5.59 billion. AFP

To: Julius Wong who wrote (1730)	4/14/2003 11:27:51 PM
From: Don Green	Respond to of 49557

Europe, Japan economies lagging By Shihoko Goto UPI Senior Business Correspondent From the Business & Economics Desk Published 4/12/2003 3:05 PM WASHINGTON, April 12 (UPI) -- The United States' high budget deficit and steep tax cuts have been criticized by some international economists, but Europe and Japan have far greater problems, U. S. Treasury Secretary John Snow said Saturday. Snow, briefing reporters after earlier meetings with finance ministers and central bankers from the world's richest countries, acknowledged that the head of the International Monetary Fund had criticized him for not reducing the U.S. trade and current-account deficits. Economic officials from the Group of Seven industrialized nations (France, Germany, Italy, Britain, Japan, Canada and the United States) will be here until Sunday to take part in the IMF and World Bank spring meetings. The global economic outlook and rebuilding post-war Iraq will be the top issues for debate. But while the IMF's Horst Koehler was critical of some U.S. economic policies, he was even more critical of the two other major economic blocs, Snow said. He noted that Koehler cautioned against economic growth slowing still further in Europe without fundamental structural reform, and Japan's lingering banking problems. "In a way, we (the United States) got off lightly," Snow said, adding that Koehler's critique came as no surprise. Indeed, IMF chief economist Kenneth Rogoff said earlier in the week if U.S. economic conditions were seen in a developing country, it would sound "warning bells." He argued that U.S. economic policy differs considerably from what the IMF would suggest for countries that were seeking IMF loans. In a joint statement following their meeting, the G-7 ministers said that "growth in most of our economies has been subdued, though uncertainties have diminished ... we each commit to pursue sound macroeconomic policies that support sustained growth." The ballooning U.S. budget deficit, coupled with an ever-increasing trade account deficit, an overvalued dollar and open-ended security concerns are all of major concern for economists and investors worldwide, given that U.S. gross domestic product growth accounts for about one-fifth of the world total. And with neither the European nor Japanese economies expected to recover soon, hopes are high that a U.S. rebound will pull up the global economy too. For 2003, the IMF projects U.S. GDP growth of 2.2 percent, expanding to 3.6 percent the following year. Meanwhile, growth in the eurozone is pegged to be even more sluggish, only 1.1 percent this year and 2.3 percent in 2004. As for Japan, its GDP growth is pegged at 0.8 percent this year, growing only to 1 percent the following year. Snow, however, stressed that it was necessary for the Japanese and the Europeans to understand that the United States, too, was dependent on their economic recovery to ensure steady growth in U.S. exports and investments. He shrugged off the IMF's concerns about the rise in the U.S. budget deficit and stated that sometimes it was appropriate to keep spending and incur debt, if the spending could lead to growth in the longer-term. Snow said that incurring a fiscal deficit at a time when the economy was underperforming, as it is now, a "stimulus made sense. "It's an investment for the longer-term," he said, emphasizing that government deficits in times of slow growth could actually bolster investments and consumption, which would in turn lead to stronger performance in the long run. Snow did, however, acknowledge that running a deficit at a time when the economy was performing well was not prudent, given that the deficit could lead to higher interest rates. Copyright © 2001-2003 United Press International