Breakingviews

Missing motorbikes point to Indonesian demand hole

June 19, 2015

A 36 percent slide in motorcycle sales in May shows just how fast falling commodity prices are eroding purchasing power. More worrying, however, is President Joko Widodo’s failure to offset the shortfall by boosting investment. A weakening currency is compounding the challenge.

Edward Hadas: Bring on kitchen economics

By Edward Hadas
June 17, 2015

A distinguished professor accuses his academic opponents of “mathiness”. It is wrong to use fancy formulas to justify intellectual prejudice. The discipline is poisoned by models created with mathematical abstractions. Equations muddy almost all economic debates.

Japan’s GDP lift is bounty from currency war

June 8, 2015

Output grew 3.9 percent in the first quarter, much faster than the 2.4 percent rate previously estimated. Investments made all the difference. Japanese exporters are ramping up capacity as they use the weak yen to fight for market share. Higher wages may be the next hopeful sign.

India GDP growth is one-third statistical illusion

June 5, 2015

Official data have become utterly unreliable. A Breakingviews analysis of corporate and consumer behaviour suggests growth is now closer to 5 percent than the 7.5 percent claimed by the authorities. Investors are quite right to be upset by half-hearted monetary easing.

Immigration is crucial to euro zone’s fortunes

By Edward Hadas
June 2, 2015

The flow of people into the single currency area could account for most of the region’s GDP growth over the next few years. Migration magnifies trends. The slower flow of new workers made the recession worse. A speed-up could turn a tepid recovery into a surprisingly strong one.

Renzi is still dodging big Italian pension fight

May 21, 2015

The prime minister has found a clever way to blunt a constitutional court ruling on pensions that threatened to blow a hole in Italy’s budget. That avoids a conflict with Brussels. But he hasn’t bitten the bullet on the bigger pension issue: bloated spending that stifles growth.

Edward Hadas: The uses and abuses of GDP

By Edward Hadas
May 20, 2015

The standard measure of output is a useful indicator of short-term trends. It can also help compare levels of development. In poor countries, faster GDP growth is a good policy goal. But in richer countries, GDP-think misses important economic changes and challenges.

EU growth surprises hide clear pattern

By Edward Hadas
May 13, 2015

Recovering Spain was still the GDP star in the first quarter, but traditionally strong Germany did no better than perpetually stagnant Italy, while France defied gloomy predictions and the UK disappointed. Behind the mix-up, the recoveries are real, but mostly slow and unsteady.

Review: China fails to live up to luxury hype

April 10, 2015

After a decade of red-hot growth, prospects have dimmed in luxury’s star market and given pause to high-end brands. With vigor returning to traditional hubs like the United States, a prediction that Chinese shoppers are establishing a Bling Dynasty looks premature at best.

Finding double-digit growth in India’s GDP fog

March 17, 2015

New statistics are deceptively rosy. If the economy can grow 7.4 pct when local interest rates are high and world demand low, how tough would 10 pct be? But complacency may lead to bad policies. Efficiency trends peg potential GDP growth at just 7 pct. Only reforms can lift it.