Economy News - part 7

Lagarde Successful in Bid for IMF Leadership

Lagarde Successful in Bid for IMF Leadership

ECONOMY

  • Christine Lagarde poised to begin five-year term as IMF chief starting July 5
  • Developing nations criticize IMF unwillingness to pick from outside EU
  • DSK scandal leaves IMF vulnerable to credibility attacks

French Finance Minister Christine Lagarde has been appointed Managing Director of the International Monetary Fund (IMF) by its 24-member Executive Board, representing the organization’s 187 member states. July 5 will mark the beginning of her five-year term.

Lagarde had lobbied for the support of Indonesia, Egypt and the United Arab Emirates to reinforce her candidacy. Lagarde, the IMF’s first female chief, was endorsed by the Obama administration just hours before the Board came to their decision and was equally backed by Europe, China and Russia.

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Business is Booming: Canadian Luxury Home Sales in Vancouver

Business is Booming: Canadian Luxury Home Sales in Vancouver

ECONOMY

  • Despite downturn of the housing sector, luxury home market is booming in large city centers
  • Sales of homes in Vancouver worth $2 million or more have doubled
  • Vancouver market has benefitted from a rise in buyers from Mainland China

The Canadian luxury home market is booming, despite the general downturn of the real estate sector. As the Canadian Real Estate Association (CREA) reported, national home sales were down 4.4% from March to April 2011, yet the average home price was up 8% from 2010.

Luxury home sales have risen nationwide, particularly in major metropolitan centers such as Ottawa, Calgary and Winnipeg. However, real estate broker firm, Re/Max, chiefly credited multi-million dollar transactions in Vancouver with boosting the average home price in Canada.

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Germany and China Step-Up Bilateral Trade

Germany and China Step-Up Bilateral Trade

ECONOMY

  • Premier Wen and Chancellor Angela Merkel sign deals worth over €10 billion
  • Bilateral trade between China and Germany expected to reach €200 billion by 2015
  • China economy suffers from inflation, debt and corruption
  • Germany emerges largely unscathed by EU debt bubble

On his trinational EU tour, Chinese Premier Wen Jiabao met German Chancellor Angela Merkel in Berlin, resulting in the signing of $15 billion (around €10.4 billion) worth of business deals.

Bilateral trade relations between China and Germany, the world’s second and fourth strongest economies respectively, call for a measure of cultural diplomacy especially in light of Germany’s criticism of its new partner’s repressive political policy.

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Home Ownership in Canada: The Impossible Dream?

Home Ownership in Canada: The Impossible Dream?

ECONOMY

  • Homeownership costs up, taking 41% of family income to buy a detached bungalow, 46% for a two-storey home and 28% for a condominium
  • Major Canadian cities most affected by the increase, including Vancouver, Toronto, Ottawa, Montreal and Calgary
  • Homeowners with a down payment of less than 20% must buy government-backed mortgage insurance
  • CREA predicts housing prices will increase 4% this year

Is the dream of home ownership becoming out of reach for Canadians? An RBC economics report revealed that, on the whole, home ownership became less affordable for Canadians in the first three months of 2011.

Taking mortgages, property taxes and utilities into account, it took nearly 41% of family income (up by 0.7%) to own a detached bungalow, over 46% to own a two-storey home (up by 0.2%) and 28% to own a condominium (up by 0.2%).

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Greenhouse Gases in Canada – Is There Hope for the Environment?

Greenhouse Gases in Canada – Is There Hope for the Environment?

ECONOMY

  • Emissions of greenhouse gases in Canada down by nearly 6%
  • Greenhouse gas emissions were 17% higher in 2009 than in 1990 despite the signing of the Kyoto Protocol
  • Calgary ranks 5th highest out of 50 global cities in carbon dioxide production, producing 17.7 tons of carbon dioxide per capita

Is there hope for the environment? According to a report submitted by Environment Canada to the UN Framework on Climate Change in May, Canadian greenhouse gas emission levels decreased for the second year in a row. The global recession, as well as the reduced use of coal for energy generation, contributed to a decline of approximately 6% (comparable to 42 megatons of carbon dioxide) between 2008 and 2009.

Back in 1997, Canada was one of several countries to sign the Kyoto Protocol – an international agreement addressing global warming linked to increased emissions of greenhouse gases such as carbon dioxide and methane. At that time Canada committed to reducing greenhouse gas emissions by 6% below 1990 levels of 590 megatons over the five-year-period spanning 2008 to 2012.

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Brazil Sets Sights on Eradicating Extreme Poverty

Brazil Sets Sights on Eradicating Extreme Poverty

ECONOMY

  • Brazil sets 2014 date to eliminate extreme poverty
  • "Brazil Without Poverty" scheme aims to send financial aid to the poorest areas of Brazil
  • Social welfare initiatives have brought 20 million people out of extreme poverty in the last decade

The Brazilian government has launched a new social welfare initiative that aims to bring millions of citizens out of extreme poverty by 2014.

President Dilma Rousseff said the main objective of her government is to help these people achieve a reasonable standard of living.

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UK Moves Forward with Energy-Efficient Green Deal

UK Moves Forward with Energy-Efficient Green Deal

ECONOMY

  • UK reveals more on Green Deal energy efficiency incentive scheme for homeowners
  • Measures will allow people to finance up to £10,000 of energy efficiency measures
  • 25 million homes to be upgraded by 2030

The UK government has given more information about its new Green Deal initiative, that aims to make UK homes more energy efficient.

Due to be launched next autumn, it will allow homeowners to finance as much as £10,000 of insulation renovations in order to reduce power consumption. Certified companies will foot the bill for the installation, and property owners will reimburse the loans, with interest, through charges added to their electricity bills.

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The Millionaire Next Door: Surge in Luxury Home Market

The Millionaire Next Door: Surge in Luxury Home Market

ECONOMY

  • 1,745,000 (14%) Canadian households have a net worth of $1 million or more
  • Among the ultra-wealthy, worth over $30 million, 21% of their net worth was found in their homes
  • Luxury home market is booming, particularly in Vancouver

The Millionaire Next Door?This American book title aptly describes the 1,745,000 Canadian households, or one out of every seven households, found by a Deloitte Centre for Financial Services study on global wealth to have net assets of $1 million or more.

Individuals with net assets of over $5 million totaled 199,000, or one out of every 65 households in Canada. Among this group, the ultra-wealthy, worth over $30 million, numbered 17,000, or 1% of millionaires.

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Japan Consumer Confidence Falls for Third Straight Month

Japan Consumer Confidence Falls for Third Straight Month

ECONOMY

  • Japanese consumer confidence index falls to 33.1 in April compared to 38.6 in March, following earthquake and tsunami
  • Consumer willingness index to buy durable goods fell from 38.8 to 32.9
  • Japanese government net debt forecasts for 2013 revised up to 145% of GDP

Confidence among Japanese consumers continued its sharp decline, following on from the earthquake and tsunami that battered the country in March.

The consumer confidence index fell for the third month in a row, with March figures of 38.6 falling to 33.1 in April – the fastest rate of decline since records began in 2004. An index below 50 shows overwhelming consumer pessimism.

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Mobile Banking in India Set to Help the Poor

Mobile Banking in India Set to Help the Poor

ECONOMY

  • One tenth of the world’s phones are sold in India, with 19 million new subscribers every month
  • India records 680,000 transactions worth nearly $13.6 million per month via mobile phones
  • Mobile banking increases financial inclusivity, spurs trade and boosts economic growth 
  • 39 banks are licensed to offer mobile banking services in India

Mobile banking could help millions of Indians without access to financial services, according to industry experts. It has the potential of transforming peoples’ livelihoods in rural and other marginalized areas of India. However a few still bottlenecks exist, such as illiteracy, lack of awareness, apprehension and limited or no banking infrastructure in rural areas.

Growth Potential  

Around 775 million people in India own mobile phones, with 19 million new subscribers adding to that number monthly. According to Gartner technology research specialists, one tenth of the world’s phones are sold in India. In contrast, almost 50% of India’s adult population does not have a bank account. The mobile platform presents the easiest and fastest channel of bringing the millions of unbanked Indians into the country’s mainstream banking system; therefore, the potential for mobile banking uptake is quite huge.

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