Mauritius economy: Better times ahead.

The Island nation of Mauritius, known for its sugarcane plantations, and tourism, is finding its way out of the recession. Tourism being the major source of foreign exchange, was hit by the declining arrivals of foreign tourists. Apart from tourism, the country earns foreign exchange from the export of sugar, textiles, clothing, and food products.

The Mauritian economy that had grown at 5% in the last few years, is expected to reach only 2.70% this year, according to forecasts of the country’s Monetary Policy Committee. The IMF had projected a growth rate of 2% for the country in 2009. The official projection of 2.70% growth is based on a smaller import bill this year on account of the fall in oil prices globally. Apart from imports of oil, the country sources its other requirements like foodstuffs, chemicals, machinery and equipment, mainly from India, and China, while it counts on France to pick up the bulk of its exported products.

China has now come to play an important role in the country’s economy, with the establishment of the China Trade Zone, that is expected to boost exports by about USD 200.00 million per annum. The balance of trade deficit is slowly narrowing with the fall in oil prices.

Restoration of the exports sector is vital for the Mauritian economy to grow and prosper. As a matter of fact, the upbeat mood in the French economy is a welcome sign for the Island nation, that can look forward to more offtake of its products from France now. But it may be a bit premature to celebrate, as the recession in Europe and elsewhere will take some time to subside, and their economies look up once again.

Finnish economy: Recovery in sight.

After being battered by the worst economic downturn in two decades, Finland is taking tentative steps towards a possible recovery. But it may take a couple of years before the country can breathe easy on this score.

The Finnish economy, heavily dependent on exports was badly affected by the drop of its export business on acount of declining demand for its products, overseas. Among the major exports of Finland are timber, pulp, paper, machinery, equipment, chemicals, metals, etc. And its imports include foodstuffs, beverages, oil, transport equipment, etc.

With the global recession hitting one and all in the pocket, overseas orders for Finnish products declined to a point where the contribution of the export sector to the GDP of the country was nearly halved to about 35%. As a consequence, investment went down, and unemployment up, and this in turn resulted ina drop in domestic consumption. A typical cycle of negative factors chasing one another.

It would appear that the Finnish establishment had not expected the recession to be so severe, and official figures about economic growth and development had to be revised more than once.

However, things may now be looking up for this country of pristine forests and the ubiquitous Nokia phone. According to the Research Institute of the Finnish Economy, the GDP for the year 2010 is set to rise by 1.5%. Exports, the life blood of the Finnish economy, are projected to pick up in 2010, and improve futher in 2011.

The enthusiasm of the Institute is shared by independent economists, who, in a recent radio interview conducted by the Finnish Broadcasting Company, expressed optimism about their economy. According to them, the economy should pick up steam in the last quarter of 2009. But given the fact that, Finland is heavily dependent on exports, there is still some uncertainty about a quick turnaround.

Romanian economy in the grip of an economic Dracula.

Romania may be in the grip of an economic Dracula, that is sucking out the blood from it, and leading to its painful demise, as it were.

According to the country’s Finance Minister, the economy is likely to contract by 8.4% to 8.5% in 2009. This matches up with the forecasts of the IMF that has extended an economic lifeline to the country. However, if things do not improve fast, this lifeline could end up as a noose around Romania’s neck.

Among the problems that Romania is now facing is a possible sovereign bankrupty, for want of funds to run the state and its institutions. Whichever facet of the economy one looks at, reveals a negative factor. Unemployment is rising by the day. Stock values are falling without a check. Investors are bleeding non-stop. Public debt is mounting without an end in sight. Trade deficit is on the rise. The real estate sector is reeling from the effects of the economic mess. Businesses are folding up and even the Banking industry is yelling for help from the Government.

In the scenario obtaining in Romania today, it was inevitable that IMF enter the scene, with all its conditions to bail out the economy, with a generous dose of money. But the fact is that, the major part of this money is going into shoring up the national currency that has been battered in the market, and the financing of the trade deficit. As Romania gets deeper into economic trouble, the IMF gets a tighter hold over its economy and system, enabling it to dictate terms that are likely to cause hardship to common Romanians, without a correspondingly beneficial fallout of these measures, as history has shown.

Only time will tell how this unfolding crisis is going to pan out in Romania, and how it is going to affect the rest of the world.

Czechoslovakia: Falling exports, failing economy.

Among the faster growing economies in Europe, this ex-Soviet bloc member is heavily dependent on exports to keep its economy ticking. According to official estimates, 60% of the country’s GDP is contributed by exports.

Western Europe is the major market for Czech exports. Glass products, beers, trams, cars, machinery, wooden toys, etc., are among the major exports that fill the Czech coffers. Among the major import items are mineral fuels, lubricants, oil, gas, etc. Having enjoyed a steady growth with the help of a robust export market, Czechoslovakia is now experiencing a downturn on account of the all round recession, leading to falling demand for its products in spite of their high quality.

Falling demand for Czech products overseas has led to increased unemployment, that now stands at around 8.50%. Worse is in store on this count in 2011. Not only are employment opportunities going to be scarce, even the wages are expected to fall in real terms. The economy is expected to grow 2.50% in 2010 and about 3.40% in 2011. Inflation though, is expected to be under control posing little problem. These are some of the findings of the country’s Finance Ministry survey conducted recently.

This Central European country that was earlier an important member of the Soviet bloc, is now an important member of the European Union, contributing handsomely to the overall economic development in the region. With Europe slowly getting out of the recession, with France and Germany leading the way, the Czech economy is expected to look up and start performing once again. However, it is anyone’s guess as to when exactly there is going to be real growth as against just a fall in the negative numbers.

Dutch economy: More bad news.

The Dutch are good at defending themselves against the ravages of the sea, as they have been doing for long. However, they may need much more than such skills to defend themselves from the ravages of the economic crisis that they are facing as a fallout of the global crisis.

According to a recent statement of the Central Planning Agency, the Dutch economy is in for some rough weather in 2010, which is being dubbed as a “crisis year”. Even the Dutch Queen has warned of tough times ahead for the country. The present crisis is said to be the worst since the Great Depression of the 1930s.

Almost all the economic indicators show a downward trend. Production is down throuhout the year. Unemployment is climbing effortlessly, and is expected to hit the 8% mark next year. The Dutch Government is ready with its plans to counter the recession. One of the most significant steps taken is the initiatin of the economic stimulus package. Public spending is expected to soften the blow of the recession on the Dutch citizens.

On the flip side, however, these measures are likely to widen the budget deficit correspondingly. The Governmen’s infusion of massive funds to the tune of USD 50.00 billion to rescue its failing Banks have had a major impact on public finances. The public has had to pay for this through higher taxes.

The political establishment is keen to avoid imposing additional burdens on the people, as they have to face the electorate in a general election in 2011. So the Dutch Government appears to have adopted a strategy to initiate adhoc measures to keep the economy going till the elections are over, and thereafter come out with a reforms package that is likely to be painful for one and all.

Hopefully, things would not get worse by that time, necessitating a about turn in official thinking.

Hungary economy: Free, but struggling.

Hungary the ex-Soviet bloc member broke out of the bloc and adopted a market oriented economy. But though free, it is struggling now in the face of the global recession.

The country, now participating in a IMF sponsored economic program, has to achieve a budget deficit target of 3.9% for 2009, and 3.8% for fiscal 2010. In order to meet this target, Hungary also cannot ignore other aspects of its economic development process.

Unemployment, that was virtually unknown in its communist days, now stands at around 9%. The Government has taken important stpes to deal with the situation. It has launched a strict austerity program, to cut down on wasteful expenditure. On the other hand, it has increased state spending to stimulate the economy. Reforms of the ta collection systems are expected to fetch some handsome dividends in the near future. But all these measures are likely to ring results after a few years.

For now, Hungary is said to be facing the worst economic situation in the last two decades. Industrial output is down. Investment is down. Unemployment is up. The IMF lifeline of USD 25. billion comes with conditions difficult to adhere to. Blancing priorities is a real test of not only competence, but also intentions.

Hungary is presently forced into a economic corner, and has to cut subsidies to the public sector, mortgages of property, public transport, and such other areas, which its citizens have taken for granted.

These measures are bound to alienate the public and make the job of the Government more difficult. Investor confidence is, on the other hand, is dictated by the tough measures undertaken by the Government to create a environment for growth and development.

All in all, it is going to be a tough time for Hungary.

Austrian economy: More trouble in store.

If the orchestras in Austria were to play music set to the current economic scene, they would indeed sound mournful. The Austrian economy, stable as it is, has not taken the current global crisiss, in its stride.

With the economy expected to contract by 3.5% to 4% in fiscal 2009, it is likely to wipe out a good part of the gains of the previous years. The two major sectors of the Austrian economy that have caused the trouble are Exports and Investments, which have practically collapsed. Among the major exports of Austria are processed foods, ores, metals, etc. And the major imports include energy, fuels, etc. Known for the quality of its goods and fine life, Austria is now struggling to control the budget deficit from going up further.

However, according to the Institute of Economic Research, the pace of decline in the economy has come down which would imply a positive turn of events. Among the positive signs is said to be the slight increase in consumption. Plus, the encouraging upward trend in production means things are moving towards normal, even though not at the desired speed.

The prospects for the economic growth in Austria in 2010 are considered comparitively better over the previous year, with consumer demand slowly picking up. Of particular significance in spurring growth and development was the scheme to swap old vehicles for new ones. This resulted in increasing demand as well as reducing the number of polluting vehicles on the roads.

However, in spite of the above measures, the economy is likely to see a downslide in the second quarter of fiscal 2009. It may be some time before the Austrians go back to enjoying their coffees and orchestras peacefully, without having to worry about the economy.

Bahamas economy hit by the downturn.

The Bahamas Islands, still among the wealthiest in the Caribbean, however, is struggling to keep its economy above the water, in the face of the global economic crisis.

The two areas that are badly hit by the recession namely, tourism, and financial services, are the two most important industries of the Bahamas. America, that is the epicenter of the global economic crisis is contributing lesser and lesser tourist dollars to the Bahamas every month, and offshore banking has become a dirty word practically, because of the unhealthy and unethical practices that have become the rule in this business.

As a result, the Bahamas is experiencing a mighty squeeze on its revenues. Fiscal 209 is going to see a negative growth of -1.70% in GDP as reported officially. Unemployment is running at 14%, and inflation is inching towards the 3% mark. With problems mounting by the month, the otherwise idyllic setting of the Islands resents a sombre mood today.

The financial services industry that is the second major revenue contributor after tourism, has not been able to absorb the hits emanating from the U.S. Banking crisis, and this has combined with the slowdown in tourism to deal a below-the-belt blow to the economy.

The Bahamas Islands also exports certain minerals, chemicals, fruits, vegetables, etc., and imports include foodstuffs, machinery, transport equipment, etc. Among the major manufacturing industries are plastics, pharma, liquor, etc.

Even though the present Government has adopted investor-friendly policies, it may not have the desired effect very soon. Unless the U.S. recovers from the recession, and its economy moves forward, the Bahamas Islands may not have much of a chance to wriggle out of the present situation.

Bulgarian economy: Tough times ahead.

The Bulgarian economy has taken a serious beating, like the rest of the world, in the current economic crisis, and desperately trying to find its feet again.

Almost all the sectors of the Bulgarian economy are said to have fared poorly in the second quarter of fiscal 2009. The agricultural sector, as well as the industrial sector have recorded contractions, with the industrial sector outperforming the agricultural in negative growth. Exports have been hit badly, though the impact of this on the balance of payments situation is moderated to an extent on account of the fall in the imports on the other hand. However, the effect of reducing imports of essential items is likely to have its own adverse impact.

The overall contraction of the economy in the second quarter of 2009 is said to be around 5%, with consumption down, and joblessness up to record levels, and coupled with declining investment. Essentially, Bulgaria presents the typical picture of a country hit badly by the current recession, with a few local variations.

But the country hopes to come out of this recession, as the world economy is looking up, if one were to go by official pronouncements on this score, by various countries. Of special interest and concern to Bulgaria is the economic situation in France and Germany, two of its largest trading partners. The reported improvement in the economic situation in these two countries presents new opportunities for the Bulgarian economy.

Bulgaria has also initiated a new stimulus package to revive its economy, but the results of the same will take some time to come. That apart, the country is also examining the prospects of IMF funding for its economy, but that is likely to come with tough and unpopular conditionalities. The coming days and weeks are going to be a tough time for the Bulgarian people.

Qatar economy: Rising star of the Middle East.

The small and over-prosperous Arabian Gulf State of Qatar has ambitious plans to reduce its dependence on hydrocarbon income, primarily, liquefied natural gas, to zero by the year 2020. Presently, it is the world’s largest producer and exporter of LNG.

Revenues from this precious resource(LNG), have been invested into building up an infrastructure for the future development of the country, and also reduce dependence on oil based revenue streams. In the year 2008, the country boasted a per capita GDP of USD 68,467.00 that was the highest in the world. The country continues to embark upon projects and initiatives that is aimed at retaining this level, and increasing it further.

The current global economic crisis has had an impact on the Qatari economy, with revenues down, but the adverse impact has been minimal, essentially in the form of a slowdown, that is likely to set back the time frame to achieve the set goals by a couple of years, according to official sources.

Qatar is encouraging foreign participation in its economic development, as much as it is interested in investing abroad in a range of opportunities, with the aim of creating a reserve and surplus for the future, as well as reducing its dependence on oil based revenues.

The country has been also active in internation fora, and is trying to build up an image of a moderate and a modern state in the Middle East, to act as a bridge between the West and the Gulf. It is an ambitious country with a budget and resources to match. The finesse with which the Qatari establishment handles the developing situations will determine the country’s level of success as an emerging leader in this part of the world.

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