Monthly Report to Parliament — Economic Summary: Subject to the Members of Assembly
Monthly Report 2017 — Economic Summary -- An excerpt from the two hundred and thirtieth parliamentary hansard: Monday, 16 October 2017 — Volume 951; October Economic Summary — Subject to the Ministers of the Executive Council, Emperor, and Realm.
Monthly Overview — October 2017
Published under the authority of the Electoral College and Parliament — 2017
The Monthly Report 2017 — Economic Summary is a monthly summary of the nineteen countries economy. It includes the latest important economic data, e.g., gross domestic product (GDP) growth; nation state inflation; people not working; the difference between imports and exports; and the difference in total value between payments into and out of the nineteen countries. It can also include other financial data, e.g., Economic Palace’s imperial cash rate. Some relevant data from our main trading partners and either one of the two largest economies in the international community of regions and nation states — that is, Maxtopia or Bigtopia — can also be used as economic datum.
Economic expansion [+] 0.247% Monthly gross domestic product growth People not working [-] 0.083% Monthly movement of unemployment rate Monetary policy [+] 0.041% Monthly inflation change Nation state surplus [+] $71.3b Monthly current account surplus change Imperial cash rate [-] 0.020% Monthly short-term bill of exchange movement
Office of Chief Economist point of view
For the last quarter of 2017 the economy is forecast to expand less in comparison to first and second quarters, which showed that output was affected by less import from trading partners in The East Pacific region for the first half of 2017. This is because of worrying outlook in certain overseas regions and nation states in the face of increasing aggression and gunboat diplomacy by expanding militaristic organisations and those opposing organisations — SACTO as one example and DEUN the other.
Participants of Economic Palace Monthly Polling think that economic growth for the September fiscal quarter will rest at 0.74 per cent. Citizen sector manufacturing and services index shows stable level correlating well with growth found in our finance and banking, machinery, semiconductor, and shipbuilding sectors. Monthly surveys conducted show the willingness of businesses to employ more people in comparison to June fiscal quarter. The Chair of the Board of Governors of Economic Palace has said that whilst she is prepared to slash imperial cash rate further in the first half of 2018, quote, the nation state must prepare for a hike in imperial cash rate in the second half of 2018. I personally want to urge mum and dad first homeowners to think very carefully before choosing to buy any particular property for the next two years; and for first time business owners to think properly before expanding assets, unquote.
Recent statistics
The Quertz russling continues to appreciate against the NationStates Dollar [or Universal Standard Dollar], climbing above 0.0121 NationStates Dollar in the September fiscal quarter. Economic Palace recorded that the last time the Quertz russling reached this level against the NationStates Dollar was in April 2012. The Federal Reserve System of the Empire of Maxtopia has more or less kept its discount rate steady since 2015, hovering from 1.75 per cent to 1.95 per cent. In case any downward movement of the Maxtopian economy will result in the Fed slashing its rate, the Economic Palace will attempt to avoid substantially increasing imperial cash rate further until at least the second half of 2018.
Gross domestic product grew in 15 Yohannesian countries in this quarter according to the Bank of Yohannes Empire-Wide Growth report. The Government of the Grand Duchy of Dali again recorded the highest quarterly contraction at [negative] 1.9 per cent, followed by the Government of the Kingdom of Burmecia at [negative] 1.3 per cent; the Crescent City Council at [negative] 0.7 per cent, and the Government of the Duchy of Blomgren at [negative] 0.1 per cent.
The ratio of index of the nineteen countries’ export prices to the index of its import prices is forecast to slightly decrease from its highest recorded level of growth — in five years — last month. In this monthly forecast the ratio of import-export prices is expected to grow by 1.3 per cent in comparison to last month’s 1.7 per cent, which again was the highest recorded monthly increase in import-export prices ratio since the 2012 March fiscal quarter. Again, worrying outlook in certain overseas regions and nation states in the face of increasing aggression and gunboat diplomacy by expanding militaristic organisations and those opposing organisations — SACTO as one example and DEUN the other — has led to slightly lower semiconductor and electronic component manufacturing prices in some nation states and certain regions overseas. Merkel Rothsdad Equal Weight Commodity Index has shown a downward trend of 0.2 per cent for the first two weeks of October so far. Continental Dry Index however has shown a very slight increase to reflect acceptable operating costs of fuel, crews, and vessels, and just slightly higher demand for merchant vessels in our trading partners.
Taking into account World Assembly’s trade-weighted effective exchange rate index, this nation state is doing well in comparison to nation states overseas affected by anarchy, chaos, and conflicts; i.e., They-who-must-not-be-named striking New Edom; intercontinental ballistic missile crisis in Puerto Colijito; the fearful stranglehold of religious extremism in Qaidi; religious revolution in Zukaristan; and anarchists rampage in Volkmacht, amongst many others unnamed here for reason of space.
Expansion of the economy
Background
According to Encyclopedia Maxtopia, the gross domestic product of a nation state is a monetary measure of the market value of all final goods and services produced in a period of time; reported commonly every quarter or year. In the nineteen countries, the most important way to track the state of the economy over the years is to check its real gross domestic product; that is, the value of economic output adjusted for price changes, i.e., inflation or deflation. The purpose of Parliament Analysis Archive’s Monthly Summary of the Economy is to allow foreign and World Assembly observers to conveniently track our empire-wide gross domestic product data and changes every month.
October 2017For the month of October, growth is forecast to be 0.247 per cent, 0.018 per cent less than September. The Office of the Chief Economist reiterates once again that this is due to output finally being affected by less import from trading partners in The East Pacific region for the first half of 2017. The amount of goods and services produced in the semiconductor industry is forecast to contract by 1.525 per cent as production of integrated circuits drop alongside base electrolytic capacitors and most optoelectronic components and devices. Semiconductor total exports are forecast to contract by 3.7 per cent by the end of October. Transducers, sensors, and detectors exports are forecast to contract by 1.45 per cent whilst those of electromechanical component exports by 1.035 per cent.
Gross domestic product 2017 Monthly GDP growth at current market prices Expenditure method $39.318 billion Per capita growth 0.071 per cent
Source: World Microcredit Foundation.
On Wednesday, 4 October, Export Industry Credit Administration (EICA) delivered its latest report on tradeable and non-tradeable sectors of the nineteen countries’ gross domestic product. In the nineteen countries, tradeable sectors are those industries delivering tradeable goods and services, i.e., producing machinery instead of building houses. Tradeable goods are also those goods facing foreign competition in the nineteen countries, i.e., products that can be imported, such as dairy products or everyday electrical components and machinery, amongst others. Tradeable industries export their products abroad. Non-tradeable goods are goods that do not face foreign competition in the nineteen countries. Non-tradeable can also be defined as something unproductive, i.e., investing in residential property instead of capital machinery and facilities for export. EICA forecast that tradeable activities in the economy is set to grow by 0.225 per cent in October, with non-tradeable growing by 0.269 per cent.
MiscellanyBank of Yohannes’ Consumer Discretionary Sector and Standard and Rich Chloe Jokes Indices’ S&R 200 Index both showed strong performance, and correlates well with forecast quantity of goods and services produced in October. The Bank of Yohannes summarised that, quote, gross domestic product growth in October is set to slow down from previous month’s high, with declining output in certain market vulnerable industries, e.g., automobiles, household durable goods, and textiles and clothing, amongst others, unquote.
Empire-Wide Growth Surveys September October Business Sentiment 63.9 59.0 Export Sales Volume 40.7 40.5
Source: BOY, Empire-Wide Growth Surveys.
Bank of Yohannes Empire-Wide Growth report highlighted growth in 15 Yohanesian countries in this quarter, with the Grand Duchy of Dali again showing highest quarterly contraction at [negative] 1.9 per cent, followed by the Kingdom of Burmecia at [negative] 1.3 per cent, the City State of Crescent at [negative] 0.7 per cent, and the Duchy of Blomgren at [negative] 0.1 per cent. Empire-wide, in the growing countries growth are registered at 4.25 per cent in total; with the Kingdom of Alexandria leading by increasing economic activities at 0.8 per cent, followed by the Regency of Lindblum at 0.5 per cent.
Point of view
Participants of Economic Palace Monthly Polling think that economic growth for the September fiscal quarter will rest at 0.74 per cent. Citizen sector manufacturing and services index shows stable level correlating well with growth found in our finance and banking, machinery, semiconductor, and shipbuilding sectors. Monthly surveys conducted show the willingness of businesses to employ more people in comparison to June fiscal quarter.
Chambers of Industry and Commerce Yohannes recently published its more downbeat forecast — a general agreement made by member Chambers to average their differing forecasts. It shows a somewhat more negative view on the economy as a result of the Greater Halsten property bubble and manufacturing decline in the heartland countries of Burmecia and Dali. The Chambers forecast a lower average monthly growth rate of 0.209 per cent in October. Export is predicted to slow down from previous figure last month, starting a downward trend until 2018 March fiscal quarter.
Economic expansion 2017 March fiscal quarter 2017 June fiscal quarter 2017 September fiscal quarter 2017 December fiscal quarter 2018 March fiscal quarter Quarterly 0.508 per cent 0.671 per cent 0.74 per cent 0.662 per cent 0.635 per cent
Source: Office of the Minister of Economy, Industry, and Trade.
Unemployment rate and workforce
Background
According to Encyclopedia Maxtopia, the unemployment rate is a measure of how many people are not working in a nation state and is calculated as a percentage by dividing the number of people not working with the number of people who are working or the workforce; and reported commonly every quarter or year. In the nineteen countries, the workforce is defined as those adults — that is, twenty years and over — who are either employed under either one of the following contracts: Casual, part-time temporary, part-time permanent, and full-time permanent.
In the nineteen countries, the workforce definition also includes those who are temporarily without jobs but are registered as those looking for jobs by relevant oganisations of the Executive Council (e.g., Work and Parenting Income and Vocational Education Authority) and those who are not employed under any of the above mentioned contract but are classified under either one the following categories: ‘Enterpreneurial’, ‘Investor’, and ‘Self-employed.’ Another purpose of Parliament Analysis Archive’s Monthly Summary of the Economy is to allow foreign and World Assembly observers to conveniently track our empire-wide unemployment and workforce data and changes every month.
October 2017In October, after accounting for seasonal adjustment, unemployment rate in the continent of Yohannes is forecast at 4.1 per cent; that is, there will be 15.5 million people registered as ‘unemployed’ by the end of October, out of a total population of 379 million, higher than originally forecast in February at 3.9 per cent, and is up 0.083 per cent from last month. Economic and Demographics Statistics Yohannes data showed that this is primarily caused by increasing participation rate but equally high net migration rate from non-Occidental nation states.
BOY business sentiment studies
(for the next two quarters) September October Will have more workers (per cent) 20.7 25.8 More people will lose jobs (per cent) 17.9 25.4
Source: Bank of Yohannes.
The workforce is forecast to increase by 0.467 per cent by the end of October, with marked increase identified in part-time temporary and full-time permanent contracts. Participation rate for adults — that is, twenty years and over — is set to increase by 0.417 per cent this month to reach 66.2 per cent, the highest level recorded since 2011 December fiscal quarter.
In the second and third quarters employment-to-population ratio increased by 1.713 per cent. For imperial citizens between the ages of twenty-eight to thirty-five, employment rate went up by 6.138 per cent since March; whilst for imperial citizens between the ages of fifty-six to seventy it went up by 5.496 per cent. Employment figures in the chemical, electrical engineering, machine tools, and optics industries indicate a rise of people working in these industries by 4.782 per cent since March. Employment in the steel and shipbuilding industries — mostly concentrated in the Kingdom of Burmecia and the Kingdom of Alexandria respectively — went down by 8.35 per cent; the highest recorded since the 1990 extended downturn.
Miscellany
Business sentiment studies indicated mixed results; more employers in October believe that the economy will expand in such a way as to allow them to hire more people; whilst and at the same time in comparison to last month more businesses believe that more people will lose jobs in certain market vulnerable industries.
Moogle Jobs and Employment — the two largest job vacancy and recruitment websites in the nineteen countries — have recorded a higher number of contracting, professional, and regular vacancy ads in the first two weeks of October when compared with the first two weeks of September. It corresponds with the Skilled Workforce and Labour Corporation’s Online Employment and Jobs Search September report, published to improve the number of universal apprenticeship, cadetship, and internship programmes in the nineteen countries by connecting small and medium-sized companies with skilled workforce and labour.
Nation state surplus
BackgroundNation state surplus (or deficit) can be gauged by looking at the difference in total value between payments into and out of that nation state, usually reported quarterly or yearly. A major part of that is the current account balance of the nation state, which is the difference between its investment, savings, and the difference between its imports and exports with the outside community of regions and nation states.
Yearly comparison October 2016 October 2017 Whole time equivalent average weekly earnings
(after tax deduction) $916.67 $902.10 Employment Cost Index movement +1.7 +1.4
Source: Office of Economic Analysis and Forecast.
October 2017
The current account balance of the nineteen countries in October is predicted to be a surplus smaller than originally forecast in February, predicted to reach 71.3 billion NSD by the end of this month; that is, equal to 0.45 per cent of GDP. This drop in surplus has been attributed to lower shipbuilding export and higher dairy product, oil, and raw material prices. Recent fluctuations in variable manufacturing costs can also be attributed to the lower than expected surplus.
Miscellany
The amount of imports that the nineteen countries can afford to purchase with its exports is expected to fall from previous high in September. In this monthly forecast the ratio of import-export is expected to grow by 1.3 per cent in comparison to last month’s 1.7 per cent, which again was the highest recorded monthly increase in import-export prices ratio since the 2012 March fiscal quarter. This was caused by higher semiconductor prices and increasing electrical component exports to Mokastana and Tekeristan, and a brief increase in both civilian and military shipbuilding exports to Caracasus, the Scandinvans, and Vangaziland, amongst others.
Point of view
Imperial Bureau of Economic Research’s monthly report forecast that nation state surplus will decline further to 67.4 billion NSD by end of November; equal to 0.43 per cent of GDP. Surplus is forecast to further decline consecutively over the next five fiscal quarters; to turn back up at the start of 2018 December fiscal quarter.
Current account balance 2017 March fiscal quarter 2017 June fiscal quarter 2017 September fiscal quarter 2017 December fiscal quarter 2018 March fiscal quarter Quarterly $174.225 billion $185.234 billion $199.98 billion $170.993 billion $286.436 billion Goods (yearly) $256.944 billion $239.976 billion $253.712 billion $261.186 billion $303.909 billion Services (yearly) $218.564 billion $220.988 billion $217.453 billion $225.735 billion $217.958 billion Investment (yearly) $314.413 billion $283.507 billion $298.253 billion $239.471 billion $299.465 billion Yearly total
(post-adjustment) $789.921 billion $744.471 billion $769.418 billion $726.392 billion $821.332 billion
Source: Office of Economic Analysis and Forecast.
Money matters
Background
The Nineteen Countries Trade Weighted Index (NCTWI) is derived from the original World Assembly’s trade weighted index; that is, an index measure of the value of the Quertz russling relative to other nation states’ currencies. Just like the Nineteen Countries Consumer Price Index (NCCPI), which is used as an economic indicator to measure inflation by tracking the price of commonly bought or essential goods and services, e.g., clothing, education, food, and transport services, amongst others, the Nineteen Countries Trade Weighted Index is used as an economic indicator to measure the worth of the Quertz russling by tracking the price of currencies of those nation states the nineteen countries commonly engage in commerce and trade with; weighting each currency with the volume of trade and gross domestic product of that currency’s nation state with the nineteen countries.
The Imperial Cash Rate (ICR) is the interest rate set by Economic Palace on overnight borrowing and lending between banking institutions of the citizen sector and Economic Palace. Economic Palace has regularly used the ICR as a tool to indirectly influence the direction of the economy and to ensure price stability. It also used the ICR to ensure that yearly inflation meets the Economic Palace’s explicit inflation rate target.
The Standard and Rich Chloe Jokes Indices’ S&R 200 Index is a share index of the 200 largest companies by market capitalisation in the nineteen countries. It is the leading stock market index in the nineteen countries, and is the official method used by parliament to measure the prosperity of businesses in the continent of Yohannes. The index is managed by Standard and Rich Incorporated and Chloe Jokes and Company.
October 2017In its recent report ‘An Assessment of Financial Stability in the Nineteen Countries: September 2017’, Economic Palace referenced the exorbitant levels of debt in the old industry sectors (i.e., coal, metallurgy, and steel) of heartland countries Bromgen, Burmecia, and Dali. Economic Palace warned that the debt-ridden coal and metallurgy industries of the Grand Duchy of Dali – with unemployment already rising by 1,300 to 459,000 in July, the highest figure recorded in ten years – are especially at risk to a fall in commodity prices or an increase in lending interest rates. Total debt in the mining sector as of the year ending September was 2.136 trillion NSD, with 1.127 trillion NSD of debt held by the Burmecian and Dalian mining sectors.
Fundamental imperial
government borrowing October 2017 (NS$) October 2017
(per cent of GDP) Gross debt issue 6.367 trillion 40.1
Source: Economic Palace.
The Quertz russling continues to appreciate against the NationStates Dollar [or Universal Standard Dollar], climbing above 0.0121 NationStates Dollar in the September fiscal quarter. Economic Palace recorded that the last time the Quertz russling reached this level against the NationStates Dollar was in April 2012. The Federal Reserve System of the Empire of Maxtopia has more or less kept its discount rate steady since 2015, hovering from 1.75 per cent to 1.95 per cent. In case any downward movement of the Maxtopian economy will result in the Fed slashing its rate, the Economic Palace will attempt to avoid substantially increasing imperial cash rate further until at least the second half of 2018. Standard and Rich Chloe Jokes Indices’ S&R 200 Index was averaged at 26,793.62 points last month, and started in October at 26,343.12 points.
Interest rates for short-term borrowings resumed its slight fall alongside interest rates for long-term borrowings, with monthly movement registered at 0.020 per cent. The Chair of the Board of Governors of Economic Palace has said that whilst she is prepared to slash imperial cash rate further if required to move future average inflation closer within target range in the first half of 2018, quote, the nation state must prepare for a hike in imperial cash rate in the second half of 2018. I personally want to urge mum and dad first homeowners to think very carefully before choosing to buy any particular property for the next two years; and for first time business owners to think properly before expanding assets, unquote.
Nation state inflation
Background
Nation state inflation is the movement in prices of goods and services in a nation state’s economy in a period of time; reported commonly every quarter or year. In the nineteen countries, ‘nation state inflation’ is computed by Economic and Demographics Statistics Yohannes’ Nineteen Countries Consumer Price Index (NCCPI), which is used as an economic indicator to measure inflation by tracking the price of commonly bought or essential goods and services, e.g., clothing, education, food, and transport services, amongst others.
October 2017NCCPI showed that consumer prices went up by 0.29 per cent last month, which contributed to an increase of 0.041 per cent in inflation. Increasing overseas energy and oil prices caused by disruption to Yohannesian shipping — i.e., spike in organised piracy and expanding DEUN and SACTO conflicts and gunboat diplomacy — and increasing importation of fruits and vegetables, dairy products, and raw materials — from Laeral, Radiatia, and the Arthurian Federation — were some of the major causes to higher consumer prices. Oil prices went up by 1.833 per cent in September, reflected in the cost of a litre of Standard Unleaded 95 petrol; ranging from 2.21 NSD up to 2.25 NSD last month. Prices of fruits and vegetables went up by 6.5 per cent in September, with noticeable spike in the prices of the most popular items in our supermarkets, i.e., banana, broccoli, potato, and mushroom.
Monthly movement September October Market Valuation Corporation: Commercial property valuations 4.7 per cent 4.5 per cent Yohannesian Real Estate Society: Residential property valuation 5.5 per cent 5.0 per cent Food Commodity Groups Index 0.9 per cent 0.9 per cent
Source: Economic and Demographics Statistics Yohannes.
Taking into account the latest monthly inflation change, yearly inflation has just exceeded the Economic Palace’s explicit inflation rate target for the medium term of 0.5 to 1.5 per cent. Other major movers are alcohols and popular beverages, dairy products, and machine tools; increasing by 3.133 per cent, 1.233 per cent, and 0.833 per cent respectively.
Miscellany
Studies conducted by Bank of Yohannes showed that respondents are expecting an inflation of at least 2.0 per cent by the 2018 March fiscal quarter, which will far exceed current inflation rate target of the Economic Palace. Pessimism of respondents are caused by such things as pressures in the construction and semiconductor industries; with bodies such as the Association of Imperial Professional Engineers, Association of Yohannesian Architects and Architectural Technologists, and Builders Yohannes unanimously expecting an inflation of at least 2.3 per cent by the 2018 March fiscal quarter. It reflects inability of citizen sector to meet demand and increasing costs of property prices caused by high-net migration from non-occidental nation states.
Point of view
Imperial Bureau of Economic Research’s monthly report has forecast that nation state inflation will slowly increase to reach 2 per cent by the 2018 March fiscal quarter. It further predicts that nation state inflation will then go down to reach 1.8 per cent again by the 2018 June fiscal quarter. It is yet to be decided whether Economic Palace’s explicit inflation rate target will be adjusted to reflect these information.
Nation state inflation 2017 March fiscal quarter 2017 June fiscal quarter 2017 September fiscal quarter 2017 December fiscal quarter 2018 March fiscal quarter Nineteen Countries Consumer Price Index 0.73 per cent 0.85 per cent 0.87 per cent 0.83 per cent 0.79 per cent Tradeable goods and services index 0.69 per cent 0.78 per cent 0.79 per cent 0.60 per cent 1.21 per cent Non-tradeable goods and services index 0.41 per cent 0.43 per cent 0.41 per cent 0.42 per cent 0.47 per cent
Source: Office of the Minister of Economy, Industry, and Trade.