Brazil & China Economic Analysis

Lastly, it would be important to how each company handles its reserves, while also looking at a country’s credit rating. Inflation, Unemployment, Economic Growth (China) Before analyzing these three components, we must understand what they are exactly: Inflation rate- measures a broad rise or fall in prices that consumers pay for a standard basket of goods. Unemployment Rate- measures the number of people actively looking for a Job as a percentage of the labor force. Annual Growth Rate in GAP- measures the change in the value of the goods and services produced by the country economy during the period of a year.

The inflation rate in China was recorded at 1. 70 percent in October of 2012. Inflation Rate in China is reported by the National Bureau of Statistics of China. Historically, from 1994 until 2012, China Inflation Rate averaged 4. 2 Percent reaching an all time high of 27. 7 Percent in October of 1994 and a record low of -2. 2 Percent in March of 1999. Unemployment Rate in China remained unchanged at 4. 10 percent in the third quarter of 2012 from 4. 10 percent in the second quarter of 2012. Unemployment Rate in China is

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Historically, from 1990 until 2012, China Stock Market (SSE Composite) averaged 1651 Index points reaching an all time high of 6092 Index points in October of 2007 and a record low of 100 Index points in December of 1990. The Shanghai SE Composite is a ajar stock market index which tracks the performance of all A-shares and a-shares listed on the Shanghai Stock Exchange, in China. Stock Market Performance (Brazil) Stocks in Brazil had a positive performance during the last month. Brazil Stock Market (PAVES), rallied 169 points or 0. 29 percent during the last 30 days.

Historically, trot 2012, Brazil Stock Market (PAVES) averaged 223 Index points reaching an all time high of 73517 Index points in May of 2008 and a record low of O Index points in June of 1984. The OBSESSIVE is a major stock market index which tracks the performance of around 50 most liquid stocks traded on the SAA Paulo Stock Exchange in Brazil. It is a gross total return weighted index. Currency Comparisons (China) Currently, one Chinese Yuan equals to about 0. 1606 U. S. Dollars. From about 2008, we have seen the Chinese Yuan appreciate from about . 013 per Dollar to 0. 16 per Dollar.

In comparison to the Euro, currently one Yuan equals to about 0. 1237 Euros. From about 2008, we have seen the Chinese Yuan appreciate from about 0. 09 Euros to about 0. 12 Euros. In comparison to Japan, currently one Yuan equals to about 13. 24 Yen. From about 2008, we have seen the Yuan depreciate from, at one point, almost 16 Yen to about 13. Yen today. Currency Comparisons (Brazil) Currently, one Brazilian Real equals to about 0. 4765 U. S. Dollars. This is interesting because we have seen a lot of fluctuation between these two currencies. Below shows a chart of this: In accordance to the Euro though, the Real has been steady.

Currently one Real can get you 0. 3668 Euros. It has been steady since 2008. In comparison to the Yen, one Real equals to 39. 1242 Japanese Yen. The Real has depreciated, where at in 2008 one Real could get about 60 Yen, but dipped below 40 in 2009. Governments Fiscal and Monetary Macro-Economic Policies (China) China in history has been known to have tight and prudent, fiscal and monetary policy trends. Tight policy has included raising commercial banks’ reserve- requirement ratios, allowing the currency to appreciate and controlling bank lending. In past times it has tried to keep its consumer-price index low.

Recently, the China Securities Journal has said that China is likely to adopt tight fiscal policy and loose monetary policy in 2013 as the new government may curtail government-led investments and be more tolerant of slower economic growth. If the new government, which will officially take power next year, adopts a tight fiscal policy, which would indicate it plans to cut spending and limit government-led investments. The shift in focus would also signal the government may accept slower economic growth, and it is likely to trim next year’s gross domestic growth target to 7%, according to the researchers.

The new government may maintain a loose monetary policy to reduce the cost of financing for enterprises, which could also help sectors of the economy with high debt to better manage loans and stem systemic risks. Governments Fiscal and Monetary Macro-Economic Policies (Brazil) In order to under?stand cur-Trend and fiscal policies of Brazil it is moor-tan to look at the dynamics of growth of the count-try in past two decades. In the 1980 Brazil was enduring slow echo-anomic compared to other nations.

This echo-anomic trend was attributed to the large foreign debt that was to be pivotal part of echo-anomic of Brazil. How-ever, by early 1990 it was obvious that this view was unilateral-real in the sense that it overlooked the public sector of the count-try which in itself was neap-ill indebted to local and tort-sign In 2009, Brazil was an emerging-market icon-mom that compared to other evolving count-ties was affected less by global echo-anomic crises nonetheless is dealing with the external and internal that negatively affect its economy.

In a context of cur-Trend global crises, Brazil is in a poss.-Zion of dealing with its rapidly industrial production, especially in the motor sector which is capital intent–sieve. Since President Lull came to power in 2002, the Brazilian government has continued to pursue the macroeconomic and fiscal policies designed by the Carrots administration. It strengthens fiscal discipline, maintains a floating exchange rate ND inflation targeting.

It also claims that the interest rate should be De-politicized, price stability be protected by institutionalizing, and central bank independence be guaranteed. International Reserves & Credit Rating (China) International reserves are a country’s “external assets”?including foreign currency deposits and bonds held by central banks and monetary authorities, gold and Sods. The top 10 holders of international reserves account for nearly two-thirds of the world’s total foreign currency reserves. China, with $2. Trillion, tops the list, according to the International Monetary Fund MIFF) and the World Bank. Standard & Poor’s affirmed China’s sovereign ratings and said the outlook remains stable, citing the nation’s “exceptional” growth prospects, holdings of overseas assets and modest government indebtedness. China’s long-term credit rating is AAA- and its short-term rating is A-1+, the company said in a statement yesterday. S raised the nation’s long-term rating to the fourth-highest level on DCE. 16, 2010.

S&P is forecasting China will “maintain strong growth” as the nation funds investment spending, even after expansion that’s set to slow in 2012 to the weakest pace in 13 years. The country is heading into a decade under new leadership, with Xi Jigging, appointed chief of the ruling Communist Party this month, set to become president next year and Lie Keening, the party’s No. 2, in line to replace Went Ojibwa as premier. “We expect no major change in policy directions in China in the wake of the recent top leadership changes,” S&P said in a statement. Efforts toward deepening structural and fiscal reforms are likely to continue. ” International Reserves & Credit Rating (Brazil) Brazil is currently 5th in terms of International reserves at $365,216, according to the International Monetary Fund (MIFF) and the World Bank. 011, in which the US faced the first ever downgrade of its credit rating, Moody’s, Fitch and now S have raised their foreign and local currency credit ratings for Brazil to reflect the government’s strong finances. We expect the government to pursue cautious fiscal and monetary policies that, combined with the country’s growing economic resilience, should moderate the impact of potential external shocks and sustain long-term growth prospects,” S&P said. The move, under which Brazier’s foreign currency credit rating was raised one notch to “BOB” and its local currency rating to “A-“, emphasizes the growing divergence between the fast-growing argue emerging markets, led by China, Brazil and India, and the advanced economies.