by Edward Hugh: Barcelonabr /br /br /pa href="http://3.bp.blogspot.com/_ngczZkrw340/SlmdGD2bh-I/AAAAAAAAOoo/P8vnyB3RTno/s1600-h/bulgaria+population.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 258px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357485959172294626" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SlmdGD2bh-I/AAAAAAAAOoo/P8vnyB3RTno/s400/bulgaria+population.png" //abr /br /br /The International Monetary Fund this week forecast the recession in Bulgaria would be deeper than it previously predicted. Such a decision should come as no surprise to anyone, since the country's economic dynamics in both the short and long term look extremely unstable, and Bulgaria is now almost certainly headed towards a series of more or less hair-raising roller-coaster rides. Even the briefest of glances at the population chart above should lead even the most sceptical among us to stop and think a little about the possible economic implications of such an appauling demographic outlook. As can be seen, the opening to the west brought a sharp outflow of people in the late 1980s (mainly ethnic Turks), but the important thing ...

by Edward Hugh: Barcelonabr /br /Italy's recession deepened at the start of 2009, with first-quarter gross domestic product falling to its worst level since at least 1980, confirming the impression that Europe's fourth-largest economy is now headed for its worst downturn since World War II. Preliminary data from the national statistics office (Istat) show that Italian GDP fell 2.4% in the first quarter when compared with the last quarter of 2008. This follows a downwardly revised 2.1% contraction in the fourth quarter of last year. Annualised this means a 9.6% contraction rate during the three months, which is very high indeed.br /br /pa href="http://4.bp.blogspot.com/_ngczZkrw340/Sg0skEokxwI/AAAAAAAAN6U/_zHT8IVLSh4/s1600-h/italy+GDP+one.png"img id="BLOGGER_PHOTO_ID_5335970131734742786" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 400px; CURSOR: hand; HEIGHT: 229px; TEXT-ALIGN: center" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/Sg0skEokxwI/AAAAAAAAN6U/_zHT8IVLSh4/s400/italy+GDP+one.png" border="0" //abr /br /br /Year on year GDP fell by 5.9%, which was also the sharpest drop since Istat's most recent data series starts in 1980 - or for ...

by Edward Hugh: Barcelonabr /br /The title to this post poses an interesting question I think, since the answer you give to it would seem to depend more on the meaning you attribute to the word "really" than on any consensually agreed objective fact. This is especially the case since Spain itself has at least two "official" unemployment numbers, so the backround to (and reason for my asking) the question is the apparent divergence between these two numbers (one from the national statistics office, and one from the employment office INEM), both of which were given extensive international press coverage recently, with the ensuing "spread" between one reading and the other causing general confusion and even leading some to question the very validity of the whole Spanish "headcount" process. br /br /As we shall see, what we have here is not necessarily a simple "fudging" of numbers, but rather ...

by Edward Hugh: Barcelonabr /br /With capital inflows to the CEE economies slowing to a trickle in Eastern Europe, a sharp correction is now underway in most countries' external imbalances and in particular in their current-account deficits. For the CEE-6 (Poland, Czech Republic, Hungary, Romania, Bulgaria, Turkey), net private capital flows are forecast to slow to $59.5 billion in 2009, down from an estimated $161.9 billion in 2008, according to estimates from the Institute For International Finance. The basic concern is that those countries with significant external deficits are extremely vulnerable to foreign capital reversals, especially in the current environment of global credit tightening.br /br /br /FDI flows (which are generally considered more stable and less susceptible to rapid outflows than other capital flows) have been the main form of financing for current-account deficits in recent years, but such inflows are set to slow sharply in 2009. The Economist estimates ...

by Edward Hugh: Barcelonabr /br /br /blockquoteIn view of Greece's EMU membership, the availability of external financing is not a concern, but the correction of cumulating indebtedness could weigh appreciably on growth going forward. While the risk of transmitting vulnerabilities to the euro area is very small reflecting Greece’s small relative size, large persistent current account deficits would increase the vulnerabilities to a reversal in market sentiment, leading to a corrective retrenchment of private sector balance-sheets in the face of rising indebtedness, and a possible appreciable rise in the cost of funding over time. These developments would have significant negative implications for growth.br /a href="http://www.imf.org/external/pubs/cat/longres.cfm?sk=21937.0"Greece: 2007 Article IV Consultation/a - IMF Staff Report/blockquotepbr /br //ppa href="http://1.bp.blogspot.com/_ngczZkrw340/SUEsR712NQI/AAAAAAAALuU/VGFiqyCyzBw/s1600-h/bond+spreads+2.png"img id="BLOGGER_PHOTO_ID_5278548924887872770" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; HEIGHT: 170px; TEXT-ALIGN: center" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/SUEsR712NQI/AAAAAAAALuU/VGFiqyCyzBw/s320/bond+spreads+2.png" border="0" //abr /The above quited paragraph from the IMF is a very good example of what used to be ...

by Edward Hugh: Barcelonabr /br /br /Well, before I go any further, yes you read the header right, with the contraction of 0.1% in Q3 over Q2 (seasonally and working day adjusted data) reported by the national statistics office (KSH) today (Tuesday) the Hungarian economy has now entered its strongsecond/strong recession since the start of 2007, since data revisions accompanying today's GDP detailed results from KSH show that they now estimat the economy contracted in strongboth/strong Q1 and Q2 of 2007 (by 0.2% in each case), thus satisfying the normal technical criterion for declaring a recession. Somehow I doubt the Hungarian press are filled today with headlines about this juicly little detail.br /br /br /pa href="http://4.bp.blogspot.com/_ngczZkrw340/ST5xOIDvDbI/AAAAAAAALr0/p6-CDg5cYwY/s1600-h/hungary+q-o-q.png"img id="BLOGGER_PHOTO_ID_5277780300820057522" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 159px; TEXT-ALIGN: center" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/ST5xOIDvDbI/AAAAAAAALr0/p6-CDg5cYwY/s320/hungary+q-o-q.png" border="0" //abr /br /While the Q1/Q2 2007 detail is a purely technical recession, in the sense that ...

by Edward Hugh: BarcelonaItaly, which is still the eurozone's third biggest economy, slipped into a recession in the third quarter. The Italian economy fell into what is now its fourth recession in less than a decade as gross domestic product shrank 0.5 percent from its level in the second quarter, when it contracted a revised 0.4 percent, the national statistics office said today. This is already Italy's worst recession since 1992, and there is evidently more and worse to come.Italy effectively followed Germany, Europe's largest economy, in posting two consecutive quarters of contraction -- the technical definition of a recession. Spain contracted on the quarter, while France narrowly avoided recession by posting a slender 0.1% expansion after contracting in the second quarter.From the third quarter of 2007 the economy contracted 0.9 percent, and this was the sharpest ...

Hungarian manufacturing continued to contract in October following a shocking performance in September, while exports drop sharply in the midst of a looming global manufacturing recession. All of which indicates that the real economy impacts of the recent financial turbulence is now about to make its presence felt. I think we are in for a real shocker in Hungary. October PMI Down Hungary's manufacturing industry contracted sharply in October, according to the latest PMI reading, which fell 5.2 points to hit 44.7 in October - a historic low, and 0.8 points below the previous worst reading registered in October 1998, according to the latest data from the Hungarian Association of Logistics, Purchasing and Inventory Management (HALPIM). Sharp Industrial Output Contraction In September Hungarian industrial production dropped the most in more than 16 years in September as the global financial crisis hit the economy and slowing growth in western Europe curbed demand for exports. Production ...

by Edward Hugh: BarcelonaHungary's agony continues with both currency and stock markets falling sharply yesterday while bankers continue to report acute credit shortages. At the same time contagion has started to extend its ugly reach right across eastern Europe, with Ukraine, the Baltics and Serbia (at a minimum) all in ongoing negotiations with the IMF, with the credit crunch which has followed in the wake of the global financial turmoil really starting to bite.

"Many central and eastern European countries simply don't have either the financial strength or the technical expertise to bail out banks,'' said Lars Christensen, a senior emerging-markets analyst at Danske Bank A/S in Copenhagen. "It's like an Iceland look-a-like contest and there are a number of candidates looking very fragile at the moment.''

Emerging-market banks plunged this morning after Standard & Poor's warned that Korea's lenders will struggle to refinance ...

French consumer confidence rose for the first time in more than a year in September as falling fuel prices left people with more to spend on food and clothing. The monthly consumer confidence servey carried out by the national statistics office came in with a reading of minus 44, up from a revised record-low of minus 47 in July, the last month for which the survey was held. The price of oil has now fallen by around a third from its record in July. Still, crude remains at more than $100 a barrel and is 33 percent higher than a year ago, while the continuing crisis in global financial markets may act as a constraint on consumers' ability and willingness to spend in coming months. Thus despite the uptick in confidence French consumer spending on manufactured goods ...