Home' A Plus Magazine : December 2013 Contents The government of Argentina
has vowed to tackle a failing
economy after a cabinet reshuffle
“We are going to provide
incentives for foreign currency
flows, job creation and invest-
ment,” incoming Cabinet Chief
Jorge Capitanich told media,
w ithout providing specific
reser ves have fallen to less than
US$32 billion, 25 percent less
than December 2012, while the
private sector estimates inflation
at about 25 percent.
“If the government fails to
tackle the underlying inflation
problem... there will be a strong
risk of some sort of currency cri-
sis,” Fiona Mackie, an A rgentina-
based analyst for the Economist
Intelligence Unit, told Reuters.
December 2013 7
team vows to
Improved retail sales lift hopes for U.S. economic resilience
Retail sales in the United States
rose 0.4 percent in October,
according to the country ’s Com-
merce Department, surprising
most analysts and suggesting the
economy is more resilient than
had been feared.
Sales of furniture, electron-
ics, appliances and clothing all
showed solid gains in a month
affected by a 16-day shutdown
of the federal government and
cheaper petrol prices.
Economists said they
suspected a decision by the U.S.
Congress to guarantee back pay
for suspended federal workers
might have helped fuel consumer
“Lower gasoline prices freed
up a considerable amount of cash
for consumers in October, and
they appear to have tuned out the
drama in [Washington] and gone
shopping,” Richard Moody, Chief
Economist of Regions Financial
Corporation in Birmingham,
Alabama, told MarketWatch, the
news and data website owned by
Dow Jones & Co.
The consumer price index
dropped 0.1 percent, the first de-
cline in six months, as costs fell for
energy, apparel and new cars. The
decrease helped boost purchasing
power, a U.S. Labor Department
Paul Dales, Senior U.S.
Economist at Capital Econom-
ics in London, told Associated
Press that additional consumer
spending would cause the overall
economy to grow at an annual
rate of 2-2 .5 percent in the fourth
quarter of 2013.
Sales in November and
December are expected to rise
3.9 percent in value over 2012’s
3.5 percent sales growth, the
National Retail Federation told
Ben Bernanke, the Chairman
of the Federal Reser ve Board,
said last month he believed the
economy was gaining strength.
He told the National Economists
Club the Fed’s efforts to revive the
economy since 2008 had been
“coherent, consistent and success-
ful,” The New York Times reported.
Worries over euro area recovery
as third-quarter results disappoint
French, Italian GDP contract, latest data show
The euro cur rency zone’s
economic recovery sputtered
in the third quarter of 2013 as
Germany’s growth slowed,
French gross domestic product
unexpectedly shrank and Italy
extended its record period of
GDP in the 17-nation area
rose just 0.1 percent in the three
months to 30 September, lower
than the 0.3 percent expansion in
the second quarter, according to
Eurostat, the European Union’s
statistics office in Luxembourg.
Growth in Germany, the
region’s largest economy, eased
to 0.3 percent from 0.7 percent.
Spain’s GDP rose 0.1 percent and
Portugal’s increased 0.2 percent.
France surprised economists
with a 0.1 percent GDP contrac-
tion. Finance Minister Pierre
Moscovici told Germany ’s RTL
Radio that the weak reading was
due to temporary factors such as a
slowdown in aircraft orders.
However, the gover nment of
François Hollande faces growing
concerns about its ability to revive
growth in the wake of Standard &
Poor’s decision on 15 November
to cut France’s sovereign credit
rating to AA from AA+.
The Italian economy also
shrank 0.1 percent. Italy’s contrac-
tion was the ninth in succession,
extending its longest stretch of
decreasing GDP since the
euro’s creation in 1999.
“ The bleak GDP estimate
shows just how f ragile and
hesitant the eurozone’s
recovery is,” Nicholas Spiro,
Managing Director of Spiro
Sovereign Strategy in Lon-
don, told Bloomberg.
a major concern. The zone’s job-
less rate of 24.1 percent among
those 25 years old or younger
caused EU leaders at a meeting in
Paris last month to boost funds to
tackle the issue.
“ We are seeing a painfully slow
recovery,” Frederik Ducrozet,
Senior Euro-Area Economist at
Credit Agricole CIB in Paris, told
Bloomberg. “ The good news is that
the economy will grow, but defi-
nitely too slowly to significantly
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