Seoul -- South Korea's government predicts economic growth of 4.8 percent in 2008, but that estimate is expected to be upgraded when the new president takes over.
The outgoing government Wednesday said its prediction of steady growth would be driven by domestic consumption, The Wall Street Journal reported.
However, President-elect Lee Myung-bak's transitional team said it was targeting growth at about 6 percent this year, a downward revision of its original 7 percent, the Journal reported.
"A slowdown in the U.S. and the global economy, inflationary pressure stemming from China, and high oil and resources prices are major risks to the local economy, but domestic consumption is showing sturdy growth," Yim Jong-yong, current director-general of the Ministry of Finance and Economy's economic policy bureau, said in a briefing on the economic outlook.
Philadelphia -- The U.S. economy will recover without any cuts in interest rates, a regional Federal Reserve president said Tuesday.
In a speech delivered in Philadelphia, Philadelphia Fed President Charles Plosser said he thought the anemic economy will "improve appreciably" by the second half of 2008 before any effect of additional rate cuts would be felt, MarketWatch reported.
Plosser said he could support further interest rate cuts if the economic outlook becomes "substantially weaker" than he expects.
"Since monetary policy's effects on the economy occur with a lag, there is little monetary policy can do today to change economic activity in the first half of 2008," he said. "I am still optimistic that the economy will improve appreciably by the third and fourth quarters of 2008, and that is when any monetary policy action today will begin to have noticeable effects."
President Bush yesterday applauded the American economy for the resilience it had shown over the course of his tenure at a speech yesterday. However, he did not talk of any new policies his government might be formulating to overcome the currently troubled economic scenario.
A Labor Department report on Friday indicated all was not okay on the unemployment and labor fronts. According to the report, the rate of unemployment had climbed up to 5 percent in the last month of 2007, with only 18,000 jobs being added, a clear indicator of a slow economy.
Washington -- U.S. employment had its smallest increase in more than four years last month and the nation's jobless rate hit a two-year high, a government report said Friday.
The glum figures indicated a weak windup for the U.S. economy in 2007 and could pave the way for a fourth consecutive interest rate cut by the Federal Reserve later this month, the Wall Street Journal said.
Non-farm payrolls rose 18,000 in December, the U.S. Labor Department said, classifying it as the job market's worst performance since a decline of 42,000 in August 2003. That was down from November's revised 115,000 gain.
The U.S. unemployment rate rose to 5.0 percent, highest since November 2005, from 4.7 percent the previous month.
Average hourly earnings increased 7 cents, or 0.4 percent, to $17.71. That was up 4.3 cents from a year earlier.
Washington -- U.S. President George Bush said he is considering proposing a stimulus package aimed at promoting growth and shoring up weak areas of the U.S. economy.
He said he may introduce the plan during his State of the Union address Jan. 28 but isn't sure of that at this point.
As the price of oil hovers near $100 a barrel and overall economic anxiety builds, Bush said he is seeking ideas from advisers about ways to handle particular economic troubles, The Washington Post reported.
"We are listening to a lot of good ideas from different people," Bush said in an interview. "We've got our people out there carefully, not only monitoring this situation but listening to . . . possible remedies."
Aides said no decision will be made on the proposal until the president returns from a trip to the Middle East on Jan. 16.
Let's face it: America isn't the booming economy it once was. Those who haven't ventured beyond the U.S. markets have gained a mere 29% from the S&P 500 (SPY) over the past five years. The MSCI EAFE index (EFA) has more than doubled that return, with 66% gains. Neither comes close, however, to the three-year returns of the MSCI Emerging Markets Index -- 146%! And that's an index.
London -- A leading British economist is calling for a suspension of the Basel banking rules that influence financial systems worldwide.
The Basel rules are adding to the current financial crisis, said Peter Spencer, who warned of an economy that could "make 1929 look like a walk in the park" if the rules are not relaxed, Britain's Telegraph reported Saturday.
The Basel rules determine how much capital banks must raise to keep their accounts in order.
Under the rules, banks forced to take off-balance sheet assets from troubled investment vehicles onto their books must raise cash from overseas or cut back dramatically on their spending, Spencer said.
Having just those two options is freezing money markets and deepening the credit crisis, Spencer said, recommending the Basel capital requirement level be cut from 8 percent to 6 percent, the Telegraph reported.
Beijing -- The latest round of U.S.-China economic talks didn't produce agreement on the crucial currency question but Chinese leaders called session a big success.
The Washington Post reported Friday the two sides, which had their Third Strategic Economic Dialogue in Beijing, couldn't agree on speeding up revaluation of China's yuan to rein in China's burgeoning trade surplus. The talks, however, produced modest agreements such as a 10-year plan to collaborate on energy and environmental issues. The U.S. side was led by Treasury Secretary Henry Paulson.
The SED sessions began in 2006 after Chinese President Hu Jintao met U.S. President George Bush.
Calling the talks a "complete success," Vice Premier Wu Yi, who led the Chinese delegation, said, "The dialogue went beyond short-term trade and economic issues, and achieved comprehensive thinking on Sino-U.S. economic relations from a strategic point of view, Xinhua reproted.
Sydney -- Australian Treasurer Wayne Swan said inflation is likely to remain a problem for the country for the next 18 months.
Swan, making his first major address since the Labor Party's electoral victory three weeks ago, said the underlying inflation rate was running at about 3 percent and faced further pressure throughout 2008.
The Australian Broadcasting Corp said that he told a forum of business and industry leaders that the new government will enforce an era of strict budgetary discipline and move toward expanding productive capacity in the economy.
Swan said the inflation threat was not just of interest to economists.
"It's one of those measures I think that Australian families are intensely interested in. They know as well mas we do that inflation puts our prosperity -- individual, business and national -- at risk," he said.
Los Angeles -- The U.S. economy will escape a 2008 recession, a UCLA study forecast Wednesday.
"Be calm, my friends. Be calm," wrote Edward Leamer, forecast director for the Anderson School of Management at the University of California, Los Angeles.
Despite rising oil prices, sinking housing prices and a turbulent stock market, the nation's economy will be saved by some of its apparent weak spots, the report said.
The silver linings include a weak dollar, which will help U.S. exports; a drop in consumer spending, which will be felt more strongly by other countries than at home; and the loss of 3 million manufacturing jobs early this decade, which means there is little room to cut more positions, the report said.
Disclaimer: The views and investment tips expressed by investment experts on themoneytimes.com are their own, and not that of the website or its management. TheMoneyTimes advises users to check with certified experts before taking any investment decision.