MacroScope

 All data released last week point to a far better first quarter growth in Canada than previously expected, prompting economists to revise up their predictions.

In a Reuters poll conducted early last month, forecasters predicted that Canada’s economy expanded by just 1.6 percent on an annualised basis in the first three months of this year.

But that consensus could prove to be too low, with many now expecting growth to be close to 2 percent or even higher, likely a welcome sign for Stephen Poloz who was named Bank of Canada’s new governor last Thursday and will replace Mark Carney on June 3.

Last Tuesday brought the first bit of good news, with the monthly gross domestic product (GDP) by industry growing at a faster pace than forecast in February, lifted by strength in potash mining, oil and gas and manufacturing.

Another pleasant surprise came on Thursday when the March report card on trade showed surging exports propelled the country to its first trade surplus in a year.

A perfect storm may be gathering over India’s economy, brought on by a peak in inflation just as the country’s festive season, which is critical to consumer demand, gets under way.

Purse strings are loosened most in India during this season, which began with Navratri on Oct. 15 and will linger on with the festival of lights, Diwali, in a couple of weeks and culminate with Christmas.

Navratri, which roughly translates to “nine nights,” and Diwali shopping in India is as important to the country’s retailers and manufacturers as Thanksgiving and New Year holiday shopping is to those in the U.S.

High inflation is a drag on economic growth in the world’s second most populous country and matters immensely to over 400 million people, or over a third of India’s total population, who struggle to earn enough to feed their families three meals a day.

The particularly volatile nature of inflation in India has confounded policymakers and small business owners and has left economists, who are often running complex statistical models based on a dearth of reliable data, with a poor forecasting record.

To be fair, predicting economic data can be pretty tough in a country where collecting and reporting national statistics is still in its infancy stage. Provisional numbers are often completely revised away.

Noe Torres and Jean Luis Arce contributed to this post. Blog updated Sept 5 to add Q2 GDP data for Brazil and Mexico.

Three weeks ago, Mexico beat Brazil on Saturday to win its first-ever men’s football Olympic gold medal. What does that have to do with economics? Maybe nothing. But as The Economist notes, Mexico’s victory might just prove “just a warm-up for more good results to come” — on the economic field.

Mexico’s economy grew 4.1 percent in the second quarter from the year-earlier period. Even considering a mild slowdown from the previous quarter due to weaker U.S. demand, this growth pace far outshines Brazil’s lackluster performance since mid-2011.

In a world of slowing growth (China), minimal growth (United States) and outright recession (Britain),  it is startling to hear that Nigeria’s economy is likely to shoot up by 40 percent in the second quarter this year. Yep. Forty percent. Four – O.

An investigation by Reuters Lagos correspondent Chijioke Ohuocha came up with this staggering figure — which if borne out will lift Nigeria close to continental rival South Africa and raise it about 10 places on the IMF’s global list to around 3oth.

This mighty rise, however, is not actually because Nigeria has had a sudden spurt of growth. You can read Chijioke’s exclusive story here, but the gist is that the country is changing the base year for its GDP calculation to 2009 from its current 1990.  One big reason is that data is better; another that it is more modern, taking in things like  mobile phones and the internet, for example. It is the latter, and things like it,  that have built up growth over thr years.

If you have ever wondered why financial markets and economists are interested in purchasing managers indexes, here is why:

Britons have a reputation for endless talk about the weather, and the UK’s Office for National Statistics is no different.

We’ve already noted how the ONS cited the effect of the royal wedding and surrounding bank holidays as one reason why the economy only managed growth of 0.2 percent quarter-on-quarter between March and June.

While that’s taken up most of the talk, the ONS also pointed to the “record warm weather in April” as another “special event” that dented economic growth.

Markets are getting used to volatile swings in economic data since the financial crisis set in three years ago. But UK GDP figures for Q2 were so eye-poppingly strong they caused confusion on trading floors.   

“Should have gone to Specsavers??” wrote Philip Shaw, chief economist at Investec, referring to British television commercials lampooning myopic citizens who desperately need a new pair of corrective lenses.

“Perhaps critics will suggest that the ONS has got it wrong again, but traders’ initial suggestions, calling into question the accuracy of the newswire reports — and this author’s eyesight — proved to be misplaced,” wrote Shaw.

Sixties nostalgia was all the rage in the late 90s, and towards the end of the last decade we looked back only 20 years or so for a massive 80s revival in electronic pop and fashion.

With the 2010s in full flow, the current vogue of choice derives from just two years ago – at least among those noted trendsetters, economists.

Back in mid-2008, the signs for the UK economy were confusing and ominous. Inflation was too high, forward-looking indicators pointed to a slowdown of some sort in the near future, and the July minutes of the Bank of England’s monetary policy committee showed they debated both easing and tightening interest rate policy.

It is fairly commonplace at the moment for U.S. and UK financial analysts — what continental Europeans call the Anglo-Saxons — to predict the collapse of the euro zone,  a project they were mostly sceptical about in the first place.  MacroScope touched on this on two occasions in March.

The latest foray into this area comes from Alan Brown,  global chief  investment officer at the large UK fund firm  Schroders. But he does it with twist,  blaming what he sees as the eventual  collapse of the euro zone not on the structure itself nor  on the profligacy of peripheral economies, but on Germany’s response to the crisis.

Brown reckons countries like Greece cannot do what is needed.

If Greece does all that it is asked to do, it’s debt/GDP ratio will rise to around 150 percent as debt continues to accumulate and the denominator declines as a result of a renewed recession and deflation. With debt at 150 percent and real interest rates anywhere near today’s level, Greece would have to run a primary surplus of around 8 percent  of GDP just to stabilise its debt ratio.