Economic news from around the world

Recent news flow suggests that the world economy remains relatively resilient.

China's National Bureau of Statistics (NBS) reported yesterday that the economy grew 9.5 percent in 2004 compared with 9.3 percent in 2003. The government's efforts at slowing down the economy hasn't borne much fruit, although fixed-asset investment did slow slightly last year to 25.8 percent compared with 26.7 percent in 2003, while industrial output grew 11.5 percent in 2004 compared to 17 percent in 2003.

Inflation, however, was strong last year, with consumer prices rising 3.9 percent, 2.7 percentage points more than the previous year, mainly due to surging food prices.

In other news yesterday, the Conference Board reported that its consumer confidence index edged up to 103.4 in January from 102.7 in December. This is its second consecutive month of improvement.

In another sign of increasing confidence in the global economy, today, Germany's Ifo index of business confidence was reported to have risen to 96.4 in January from 96.2 in December. It is the strongest level for almost a year.

Earlier today, Japan's Ministry of Finance reported that its trade surplus in December fell a seasonally-adjusted 3.9 percent from the previous month to 949.7 billion yen. Exports decreased 5.6 percent to 5.04 trillion yen while imports fell 6.0 percent to 4.09 trillion yen.

For 2004 as a whole, Japan's trade surplus rose 17.9 percent to 12.01 trillion yen, with exports increasing by 12.2 percent to 61.18 trillion yen and imports rising by 10.8 percent to 49.17 trillion yen.

While this news may lend some support to the US dollar, new estimates for the US budget deficit is unlikely to.

US government officials now estimate that the budget deficit is likely to hit a record US$427 billion in the fiscal year of 2005, boosted by funding requirements for Iraq and the war on terrorism.