Wednesday, January 6, 2016
Euro Zone Crisis in PIGS
Greece
·
The
government spent heavily to keep the economy functioning and the country's debt
increased accordingly.
·
By
April 2010 it was apparent that the country was becoming unable to borrow from
the markets
·
By
April 2010 it was apparent that the country was becoming unable to borrow from
the markets
·
All
the implemented austerity measures have helped Greece bring down its fiscal deficit 10.6% of GDP in 2009 to just
2.4% of GDP in 2011, but as a side-effect they also contributed to a worsening
of the Greek recession, which began in October 2008 and only became worse in
2010 and 2011.
·
As
a result, seasonal adjusted unemployment rate grew from 7.5% in September 2008
to a record high of 27.9% in June 2013, while the youth unemployment rate rose
from 22.0% to as high as 62%.
Ireland
·
The
Irish sovereign debt crisis was not based on government over-spending, but from
the state guaranteeing the six main Irish-based banks who had financed a
property bubble
·
Irish
banks had lost an estimated 100 billion euros, much of it related to defaulted
loans to property developers and homeowners made in the midst of the property
bubble, which burst around 2007.
·
The
economy collapsed during 2008.
·
Unemployment
rose from 4% in 2006 to 14% by 2010, while the national budget went from a
surplus in 2007 to a deficit of 32% GDP in 2010, the highest in the history of
the eurozone.
Portugal
·
Portugal had allowed considerable slippage in
state-managed public works and inflated top management and head officer bonuses
and wages.
·
Persistent and lasting recruitment policies
boosted the number of redundant public servants.
·
When the global crisis disrupted the markets and
the world economy, together with the US credit crunch and the eurozone crisis,
Portugal was one of the first and most affected economies to succumb.
·
In the summer of 2010, Moody's Investors Service
cut Portugal's sovereign bond rating, which led to an increased pressure on
Portuguese government bonds.
Spain
·
Spain had a comparatively low debt level among
advanced economies prior to the crisis.
·
Its public debt relative to GDP in 2010 was only
60%,
·
Debt was largely avoided by the ballooning tax
revenue from the housing bubble, which helped accommodate a decade of increased
government spending without debt accumulation.
·
When the bubble burst, Spain spent large amounts
of money on bank bailouts.
·
Questionable accounting methods disguised bank
losses.
·
During September 2012, regulators indicated that
Spanish banks required €59 billion (USD $77 billion) in additional capital to
offset losses from real estate investments.
·
The bank bailouts and the economic downturn
increased the country's deficit and debt levels and led to a substantial
downgrading of its credit rating.
·
To build up trust in the financial markets, the
government began to introduce austerity measures.
·
Spain is suffering with 27% unemployment and
economy shrank by 1.4% in 2013.
Inflation Rate, not going as expected by Nepal Rastra Bank
Due to the obstruction in the distribution system of consumer idem & hording of those items by consumer owing to the unrest in Tarai and Indian blockade, Inflatin has been increased to over 10 percent. From the last fiscal policy we have seen that Government had aimed to limit inflation to 8 percent. But actual rate is not going as expected by the government and authorized central department, Nepal Rastra Bank Ltd.
Here, there were different tools that Rastra Bank brought to the market to control inflation. Stating that inflation cannot be controlled through monetary tools alone unless supply eases. The authorized body already warned of serious consequences of the increasing rate. Especially, rate of inflation has been increased on most important consumer item like, Ghee, Cloths, and Oil according the data provided by the Central Authorized body.
It’s been almost five months of Indian blockade, but there is no any positive sign, every politician are much more conscious of their individual benefit and directly affected foreign trade, Import fell by 38.8 percent whereas export by 29.10 during the months. Nepal exported goods worth Rs. 20.96 billion during the period and imported goods worth Rs. 160.99 billion with foreign trade. Remittance has been increase by 19 percent to Rs. 215.29 billion in the first four months as per the latest data published by the Central Authorized Body.
Here, there were different tools that Rastra Bank brought to the market to control inflation. Stating that inflation cannot be controlled through monetary tools alone unless supply eases. The authorized body already warned of serious consequences of the increasing rate. Especially, rate of inflation has been increased on most important consumer item like, Ghee, Cloths, and Oil according the data provided by the Central Authorized body.
It’s been almost five months of Indian blockade, but there is no any positive sign, every politician are much more conscious of their individual benefit and directly affected foreign trade, Import fell by 38.8 percent whereas export by 29.10 during the months. Nepal exported goods worth Rs. 20.96 billion during the period and imported goods worth Rs. 160.99 billion with foreign trade. Remittance has been increase by 19 percent to Rs. 215.29 billion in the first four months as per the latest data published by the Central Authorized Body.
Subscribe to:
Comments (Atom)
