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UK + Eurozone Crisis

Discussion in 'World Economy' started by santosh, Mar 30, 2014.

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  1. HMS Astute

    HMS Astute BANNED BANNED

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    Bank of Spain sees faster economic growth

    The Bank of Spain on Tuesday raised its economic forecast for 2014 and said growth accelerated in the fourth quarter, echoing optimism among analysts that falling oil prices will strengthen the country's recovery.

    Predictions of a greater-than-anticipated growth spurt in Spain are accumulating -- a sharp shift away from worries a few months ago that its struggle to shake off recession would be held back by a slowdown in other euro zone economies including France.

    A faltering euro zone still posed a risk, the central bank said in an economic bulletin, and it flagged oil prices, which have halved since June, as another uncertainty for a country that imports most of its energy.

    But it estimated Spain's gross domestic product (GDP) was on course to grow 0.6 percent quarter-on-quarter in the last three months of the year. That compares with 0.5 percent quarterly growth in the previous two quarters, according to official data.

    The Bank of Spain also raised its forecast for 2014 GDP growth to 1.4 percent from 1.3 percent, while maintaining a 2 percent projection for 2015.

    ...

    Bank of Spain sees faster economic growth | Reuters

    [​IMG]
     
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  2. santosh

    santosh Major SENIOR MEMBER

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    @HMS Astute

    here, there are 3 main possibilities of "Average Americans", as below:-

    1st; Chance is less than 1% that someone belongs to an Industrialist group of USA, as per the above facts of USA

    2nd; chance is around 37%+ that common American civilians don't have any source of income, as only around 63% working age people of US has any job, which exclude house wives, students, early retired people etc too. and this is the lowest level since September 2008 economic collapse, check it carefully......
    3rd; and, there is around 47/315 = 15% chance that common US's civilians are dependent on Food Stamp to feed thenselves.

    (here, as in the above news, $30,000 or less income does means for less than 18 lacs Rupees a year but prices in USA is also different. even a medium size coffee cost $3.2 (Rs 200) on the streets of Sydney and food no less than $10 (Rs 600) on any shop :disagree:. hence $30,000 or less income for 53% working age group does mean for a "non-luxury" life. which exclude those 37% of working age group who don't even have any source of income, :ranger:)

    and its worth mentioning that these 37% people of US avoid slum because of $1.0trillion+ borrowing for their social security/free medical etc.. the USA which is already indebted by a huge $18.0trillion+ debt to date.... :ranger:)

    =>
    further to the above post, this is how US register drop in Unemployment rate :coffee:
     
  3. santosh

    santosh Major SENIOR MEMBER

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    Prices Fall and Worry Escalates in the Eurozone
    JAN. 7, 2015

    PARIS — Europe’s economy has reached a psychological inflection point.

    On Wednesday, an official report showed that consumer prices in the eurozone fell 0.2 percent in December from a year earlier, the first time they have turned negative since the dark days of the global financial crisis in 2009.

    It is an outcome that economists have been predicting for more than a year and a trend that has long been complicating Europe’s recovery.

    Now, the latest data is adding concerns that Europe is headed for a new financial and economic crisis. Unemployment remains persistently high. The euro has been particularly weak. And the political upheaval in Greece is prompting talk about the stability of the 19-country euro currency union. :ranger:

    With the outlook deteriorating, pressure is mounting for the European Central Bank take more aggressive action to avoid a downward price spiral that could undermine the economy for years to come. Top officials have already been signaling that they could announce a major bond-buying program later this month.

    But the question raised by many economists is whether the European Central Bank has waited too long to act, and whether its arsenal is powerful enough to address the eurozone’s fundamental problem — a dearth of demand from businesses and consumers for goods and services. Even the bank’s president, Mario Draghi, has said that it alone cannot shoulder the burden of restarting growth.

    “The eurozone is suffering from a profound malaise,” said Simon Tilford, deputy director of the Center for European Reform, a think tank in London. “It’s already in a deflationary trap of the kind we saw in Japan in the 1990s, but it’s less well equipped than the Japanese to deal with it,” he added, citing the institutional challenges of managing a currency bloc of 19 nations.

    The situation in Europe does not appear to meet the classical definition of deflation, a widespread, protracted and self-sustaining decline in prices. And the continued global collapse of crude oil prices contributed significantly to the decline, blurring somewhat the implications of the inflation report for the 19-country euro currency union.

    But the trend is dangerous. The low inflation environment was already a signal of a listless economy, with consumers spending little despite low prices and companies having scant incentive to invest in their businesses.

    If prices actually fall for an extended period, consumers might delay purchase in hopes of getting a better deal later, and businesses would see little reason to make products that would be worth less with each passing month.

    "We’re not yet in a self-sustaining spiral,” said Gilles Moec, chief European economist at Bank of America in London. “But we’re close.”

    The labor market provides one illustration of what makes Europe’s situation particularly complicated to fix.

    A separate official report on Wednesday showed that the eurozone jobless rate remained at 11.5 percent in November, around the level at which it has been for the last year. But overall numbers don’t give a complete picture of what’s happening in each country, where fortunes are diverging.

    In Germany, which has the bloc’s biggest economy, unemployment fell to 6.4 percent in December from 6.5 percent in November. But in the second- and third-largest of the eurozone economies, France and Italy, the jobless rates climbed, with Italian unemployment reaching a new high of 13.4 percent.

    And in Greece and Spain, about a quarter of the population remains without work, a level consistent with economic depression.

    Analysts said on Wednesday that it was now a certainty that the European Central Bank would announce aggressive new measures when it meets in Frankfurt on Jan. 22. They expect the central bank to say it is ready to begin effectively printing money that it would use to buy eurozone government bonds, even if it does not put the measures into practice for several months.

    In doing so, the bank would follow an unconventional policy similar to the quantitative easing used by the Federal Reserve to stimulate the American economy.

    But quantitative easing is a divisive issue in Europe because of questions about how to allocate the bond buying among eurozone countries, and who would pay if a government defaulted on bonds held by the central bank. That uncertainty is a main reason that Germany does not want to put its taxpayers at risk of having to bail out the bloc’s weaker neighbors.

    The central bank has an official goal of trying to keep inflation at just below 2 percent, which it considers an optimal level for a healthy economy. But the bank has not met that target in two years.

    Japan’s experience in the 1990s showed that traditional monetary policy instruments are largely ineffective with nominal interest rates at zero, as they essentially are now in the eurozone.

    Another way to address the problem might be for eurozone countries to drop their insistence on balancing budgets and to instead use tax cuts and public spending to create demand.

    So far, though, European officials appear to be holding their course.

    “Yes, the eurozone is going through a period of low inflation,” Jeroen Dijsselbloem, the Dutch finance minister and president of the Eurogroup of eurozone finance officials, said in a statement in response to a New York Times query. “But one of the most important reasons for the current low inflation rate is the falling oil price. Core inflation — excluding oil prices — has recently slightly increased.” :ranger:

    The core inflation rate, which excludes energy and food prices, ticked up to 0.8 percent in December from 0.7 percent the month before, according to Wednesday’s data.

    The German government of Chancellor Angela Merkel, which has taken a tough line against coordinated economic stimulus, indicated that the latest data had not altered its thinking. A spokesman for the Finance Ministry said in Berlin on Wednesday that Germany would not revise its analysis that there was no risk of deflation in the country. That statement came despite a report on Monday showing that German consumer prices rose 0.1 percent last month.

    Jörg Krämer, chief economist at Commerzbank in Frankfurt, on Wednesday defended the German view, saying that the danger was being overstated in light of the debt overload that was behind the global and European financial crisis that developed in 2008.

    “It’s inevitable after the bursting of a debt bubble that inflation is low, as consumers and business repay their debts and spend only hesitantly,” he said.

    Some of the weakness in prices reflects lower labor costs in the weaker “peripheral” eurozone members, he said, something that can make their economies more competitive. “We do not have harmful deflation,” he said.

    There is no question, though, that the eurozone is ailing. The bloc’s economy expanded 0.6 percent in the third quarter of 2014 on an annualized basis. That is far short of the United States economy’s 5.0 percent growth, and recent data suggest that the eurozone pace has been slowing.

    That stark difference is one reason the value of the euro currency has been plunging compared to the dollar in recent weeks. It fell again on Wednesday after the inflation report, declining more than 0.5 percent to $1.1816 — its lowest level in nine years. As was the case the last time the euro was this low, fund managers are moving investments to the United States in expectations of a better return on their money.

    Consumer prices in the eurozone had not contracted on an annual basis since October 2009, when the slack global economy made the bottom fall out of the market for oil and other commodities. December’s negative rate was down from the 0.3 percent increase in November.

    Well before eurozone consumer prices tipped below zero, the region’s low inflation rate had been raising alarms.

    Economists with the International Monetary Fund warned early last year that the difference between ultralow inflation, which they called lowflation, and outright deflation was mainly a matter of degrees, as the weak price pressures could “scupper the nascent recovery and pressure the most fragile countries.”

    Mr. Draghi, the central bank president, said last week in an interview with the German newspaper Handelsblatt that the risk of deflation “cannot be ruled out completely, but it is limited.”

    “We are not there yet,” Mr. Draghi said. “But we need to tackle this risk.”

    Investors have been snapping up government bonds of eurozone countries amid expectations that a European Central Bank purchasing program would make them more valuable. Yields on German, French and Belgian bonds have all hit record lows this week.

    Ireland on Wednesday was able to issue seven-year bonds at a yield of 0.867 percent, an astonishingly low rate for a country that was bailed out by the I.M.F. and the European Union in 2010.

    Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, wrote in a note on Wednesday that the contraction in consumer prices “is a severe blow to the credibility” of the European Central Bank.

    “The E.C.B.’s hand has been forced,” he said. “Anything less than a firm pledge by its president, Mario Draghi, that sovereign quantitative easing is imminent will be taken very badly by markets."

     
  4. santosh

    santosh Major SENIOR MEMBER

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    @Picdelamirand-oil
    @Averageamerican

    UK's economic growth for 2014 revised up

    The UK's economy grew at a faster pace than initially estimated last year, revised official figures show.

    The economy grew by 0.6% in the final three months of 2014, up from the previous estimate of 0.5%, the Office for National Statistics said.

    The unexpected increase meant growth for the year was 2.8%, higher than the earlier estimate of 2.6%.

    The revised rate marks the highest pace of annual growth since 2006, when the economy grew by 3%.

    An expansion in both production and services as well as household spending helped to drive the increase, the official data suggested.

    But the biggest contribution to the revised figure was a strong performance of exports, the ONS said.


    [​IMG]

    'Vulnerable'
    The revised figure was revealed alongside data showing that the UK's current account deficit - the gap between the income paid to, and received from, the rest of the world - narrowed in the final quarter of last year.

    The deficit in the three months to December was £25.3bn, down from the record-high of £27.7bn recorded in the previous quarter. :coffee:

    But for the year as a whole, the deficit widened to 5.5% of GDP, marking the largest annual deficit since records began in 1948.

    UBS economist David Tinsley said the large deficit largely reflected weakness in UK overseas earnings "which may turn around if the eurozone recovery heats up".

    "Still, regardless of the cause, funding a deficit of this size makes the UK vulnerable in a year when political uncertainty is relatively high," he added.

    'Touch pessimistic'
    Separately, UK consumer confidence rose to its highest level in more than 12 years in March, a survey from researchers GfK showed.

    And separate figures from the ONS showed that the financial well-being of UK households improved last year.

    Overall, economists suggested the figures boded well for the UK economy this year.

    Analysis: Robert Peston, BBC economics editor

    The UK's economic performance, in the round and as it touches people, is definitely improving - and looks good compared with competitor nations, especially those across the Channel.

    GDP or national income per capita is 4.8% above where it was at the election - although it is still 1.2% below its peak at the start of 2008, before the Great Recession and financial crisis.

    And if we measure our well-being by how much we spend, then things are definitely better - since household consumption per head is 3% higher than it was in the middle of 2010.

    That said, many would argue that our recovery remains unbalanced and far too dependent on consumer spending: that we are experiencing "same-as-it-ever-was" growth, of the boom-and-bust variety.


    "Given the outlook for consumer spending, the Office for Budgetary Responsibility's forecast of 2.5% for 2015 looks a touch pessimistic, and could come under some upward pressure in the coming months," said Ben Brettell, senior economist at Hargreaves Lansdown.

    Martin Beck, senior economic advisor to the Ernst & Young economic forecaster ITEM Club, said he remained confident about its prediction that GDP would expand by close to 3% in 2015.

    UK's economic growth for 2014 revised up - BBC News
     
  5. santosh

    santosh Major SENIOR MEMBER

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    @HMS Astute
    @Averageamerican
    @Picdelamirand-oil

    any more 2008-09 type recession may make changes in world

    we may see many funny things in coming years

    how do you people see the news of article of last post#139? UK claims to be the second best performing economy of EU, after Germany. while its Public Debt is 80%+ to GDP right now, as compare to its low of around 38% to GDP in early 2008. total government Debt of UK would be well over 95% to GDP. i generally know UK's and France's national debt almost equal, around 95% to GDP by end 2014...

    while Per Capita Income of UK adjusting inflation, is still 1.2% below to its early 2008 level, as in this article, even after so much debt borrowing since early 2008,? :facepalm:

    while in case of Total Debt, which includes, Household Debt+Government Debt+Business Debt, UK find itself to be in match with Japan as below too.....

    how you people would analyze this news of UK. i would still consider UK doing reasonably good as compare to its other EU's partners :coffee:

    PD-AA, with knowledge of economy, once i even predicted that UK won't ever achieve its Per Capita Income of Early 2008. as even right now, its more than 7 years have gone since then, isn't it?...... because when you have Debt to GDP ratio above 90%, you then have to do hefty budget cuts, which then undermine growth rate further. as, after hefty cuts on the side of investments, as we saw in case of EU since 2008, what exactly will drive the growth??? more budget cuts and further downgrade of growth prospects.....

    a developing country like India achieved around 6.4%+ growth rate per year since early 2008, which was similar to other emerging economies like Philippines-Indonesia-Vietnam etc too, as compare to over 8% growth rate of China since then... and then it means that even if a developing country like ASEAN+India etc have high debt, for example, then with passage of time, the Debt to GDP ratio would be further reduced. while in case of OECD economies, considering the hefty cuts in budget expenditure since early 2008 due to having over 90% Debt to GDP, they won't be able to achieve their last 25 years average of 1.5% growth too, i dont think so.....
    (as, in case of India, its Public Debt is hovering at around 50% to GDP and its 'nominal' GDP increases by around 15% to 20% per year due to high inflation and other value added factors.....)

    => also, its worth mentioning that the issues of 2008-09 recession are still present, and if we see any more recession, the current OECD economies won't be able to borrow debt in the way they did during the 2008-12 period :disagree:. and it may be the case when it may then help these so called industrialized nations get their industries back from China, its good, in fact....... and it will be the case when their per capita income would fall below to that of CHina, hence making manufacturing products cheap in US/EU this way....

    but there are some other issues too. if OECD economies gets their industries back from the emerging economies like China+ASEAN+India etc, it would first result in a very high inflation in beginning. and as, "high inflation means for high interest payments on the debt they have borrowed to date", they may then have to withdraw their most of the social security expanses to pay interests on the debt they have already borrowed to date, not sure...... hope, we won't see any "social unrest" type thing there in case of any more recession like 2008-09. as the issues of 2008-09 recession is still present, while more visible now as we saw further movements of industries to developing countries during the 2008-15 period too....

    we may see many funny things in coming days, in fact. only the economies like Australia, Canada, Russia, Norway etc look comfortable in such case, whose minerals/resource export accounts for more than 70%+ of their total export. and yes, hefty oil-gas-resource pumping by US too would keep them standing as it is, i sincerely believe :tup:
     
    Last edited: Apr 2, 2015
  6. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    How India got its funk
    India’s economy is in its tightest spot since 1991. Now, as then, the answer is to be bold
    From the print edition
    [​IMG]
    IN MAY America’s Federal Reserve hinted that it would soon start to reduce its vast purchases of Treasury bonds. As global investors adjusted to a world without ultra-cheap money, there has been a great sucking of funds from emerging markets. Currencies and shares have tumbled, from Brazil to Indonesia, but one country has been particularly badly hit.
    Not so long ago India was celebrated as an economic miracle. In 2008 Manmohan Singh, the prime minister, said growth of 8-9% was India’s new cruising speed. He even predicted the end of the “chronic poverty, ignorance and disease, which has been the fate of millions of our countrymen for centuries”. Today he admits the outlook is difficult. The rupee has tumbled by 13% in three months. The stockmarket is down by a quarter in dollar terms. Borrowing rates are at levels last seen after Lehman Brothers’ demise. Bank shares have sunk.

    On August 14th jumpy officials tightened capital controls in an attempt to stop locals taking money out of the country (see article). That scared foreign investors, who worry that India may freeze their funds too. The risk now is of a credit crunch and a self-fulfilling panic that pushes the rupee down much further, fuelling inflation. Policymakers recognise that the country is in its tightest spot since the balance-of-payments crisis of 1991.
    How to lose friends and alienate people
    India’s troubles are caused partly by global forces beyond its control. But they are also the consequence of a deadly complacency that has led the country to miss a great opportunity.
    During the 2003-08 boom, when reforms would have been relatively easy to introduce, the government failed to liberalise markets for labour, energy and land. Infrastructure was not improved enough. Graft and red tape got worse.
    Private companies have slashed investment. Growth has slowed to 4-5%, half the rate during the boom. Inflation, at 10%, is worse than in any other big economy. Tycoons who used to cheer India’s rise as a superpower now warn of civil unrest.
    As well as undermining 1.2 billion people’s hopes of prosperity, failure to reform dragged down the rupee. Restrictive labour laws and weak infrastructure make it hard for Indian firms to export. Inflation has led people to import gold to protect their savings. Both factors have swollen the current-account deficit, which must be financed by foreign capital. Add in the foreign debt that must be rolled over, and India needs to attract $250 billion in the next year, more than any other vulnerable emerging economy.
    A year ago the new finance minister, Palaniappan Chidambaram, tried to kick-start the economy. He has attempted to push key reforms, clear bottlenecks and help foreign investors. But he has lukewarm support within his own party and faces obstructionist opposition. Obstacles to growth, such as fuel shortages for power plants, remain. Foreign firms find nothing has changed. Meanwhile, bad debts have risen at state-run banks: 10-12% of their loans are dud. With an election due by May 2014, some fear that the Congress-led government will now take a more populist tack. A costly plan to subsidise food hints at this.
     
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  7. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    Stopping the rot
    To prevent a slide into crisis, the government needs first to stop making things worse. Those capital controls backfired, yet the urge to tinker runs deep: on August 19th officials slapped duties on televisions lugged in through airports. The authorities must accept that 2013 is not 1991. Then the state nearly bankrupted itself trying to defend a pegged exchange rate. Now the rupee floats, and the state has no foreign debt to speak of. A weaker currency will break some firms with foreign loans, but poses no direct threat to the government’s solvency.
    And so the Reserve Bank of India must let the rupee find its own level. The currency has not yet wildly overshot estimates of fundamental value. Raghuram Rajan, the central bank’s incoming head, should aim to control inflation, not micromanage one of the world’s most traded currencies.
    Second, the government must get its finances in order. The budget deficit has been as high as 10% of GDP in recent years. This year the government must hold down its deficit (including those of individual states) to 7% of GDP. It is already cutting fuel subsidies, and—notwithstanding the pressures in the run-up to an election—should do so faster.
    This is not enough to fix the government’s finances, though. Only 3% of Indians pay income tax, so the government’s tax take is puny. A proposed tax on goods and services, known as GST, would drag more of the economy into the net. It is stuck in endless cross-party talks. If the government can rally itself before the election to push for one long-term reform, this is the one it should go for.
    Last, the government, with the central bank, should force the zombie public-sector banks to recapitalise. In 2009 America did “stress tests” to repair its banks. India should follow. Injecting funds into banks would widen the deficit, but the surge in confidence would be worth it.
    There are glimmers of hope: exports picked up in July, narrowing the trade gap. But India faces a difficult year, with jittery global markets and an election to boot. Even if it scrapes past the election without a full-blown financial crisis, the next government must do much, much more to change India. Over the coming decade tens of millions of young people will have to find jobs where none currently exists. Generating the growth to create them will mean radical deregulation of protected sectors (of which retail is only the most obvious); breaking up state monopolies, from coal to railways; reforming restrictive labour laws; and overhauling India’s infrastructure of roads, ports and power.
    The calamity of 1991 led to liberalising reforms that ended decades of stagnation and allowed a spurt of fast growth. This latest brush with disaster could produce a positive legacy, too, but only if it persuades voters and the next government of the importance of a new round of reforms that deal with the economy’s flaws and unleash its mighty potential.
     
  8. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    Don't think India needs to worry about UK, EU or the USA. we know what we are doing.
     
  9. santosh

    santosh Major SENIOR MEMBER

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    @Picdelamirand-oil

    AA, im just discussing topic of this thread, 'only'. I have topics related to BRIC economies as below too, where i discuss about India, and you are welcomed there too :tup:
    BRICS, E7 Economies, and IBSA | Indian Defence Forum

    from here, you just said something opposite, as, there is generally no worries for emerging economies like China+India+ASEAN, who all grew over 6%+ growth rate per year since 2008-09 recession, low national debt and having more investments too. and yes, any sudden fall of OECD economies as whole would definitely affect the whole world, including India, and hence this topic has its own importance.

    i go this topic mainly in 2012, from the economic section of Guardian newspapers as below. this is a topic, which is always discussed since 2012 itself, which gave me an idea to run this topic :coffee:
    Eurozone crisis live | Business | The Guardian

    similarly US's high debt has been a topic of almost every day discussion since 2009 recession, and im also running a thread related to it as below. you are invited there too :tup:
    High Debt Risk in US | Indian Defence Forum
     
    Last edited: Apr 2, 2015
  10. Picdelamirand-oil

    Picdelamirand-oil Lt. Colonel MILITARY STRATEGIST

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    Report on other economies are frequently worrying but not accurate. People in west are 20 time richer than in India if we loss 10 %(which never happen ) we continue to be 18 time richer than India so it doesn't matter. In fact services are cheaper in India so in PPP we are only 5 time richer than India. But when we loss 10% in real terms, we loss only 1% in PPP. If you consider only variation of money it is like make measure of a lenth with an elastic. So don't worry for us!
     
  11. santosh

    santosh Major SENIOR MEMBER

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    PD-AA, in 'exchange rates terms', people of US have 25 time higher salaries than Indians, and 80 times higher debt they have, the 'Total Debt' which includes government debt+household debt+business debt.

    and the prices of products there would be around 8 to 10 times higher than their prices in India, as per my own experience of buying products in Australia and India...

    im just going to buy a coffee here in Delhi, which would required around 20 rupees (30 cents), while for the same type of Medium size flat white in Sydney, i used to pay $3.2. whats the price of coffee in US and France? :coffee:
    :coffee:
     
    Last edited: Apr 2, 2015
  12. Picdelamirand-oil

    Picdelamirand-oil Lt. Colonel MILITARY STRATEGIST

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    As I said Services are cheaper in India : in a coffee taken in a shop there is 0.15 cents for the service and 0.15 cents for cafee material. And in US service is roughly 20 time more expensive so the price is (20 x 0.15) + 0.2= 3.2
    This is for services on which you cannot make effort of productivity.
    If now you buy a BMW car, it will cost the same in India and in US (except for taxes etc.. which could be different). You will say yes but it's a foreign car, if I buy an Indian car it will cost less.
    But it's not the same car, if India would try to make the same car it will cost the same, because productivity is not the same in India and in the west and it's why the west people are 20 time richer, they are also 20 time more productive. An exemple : when we ask HAL to build Rafale our expectation was that it will be cheaper, but in fact it cost more than in France!
     
  13. ersakthivel

    ersakthivel Lieutenant FULL MEMBER

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    So by the same logic if we ask Dassault to build Tejas and ALH , costs will be cheaper perhaps!!!!

    Cost of rafale in HAL is determined by the prices fixed by Dassault for key products supplied from their side and nothing else.

    Same goes with the claim HAL built sukhoi costing more than russain built ones. if HAL is bound by contract to buy all the ,"raw materials from " Russia according to their prices then there is no way HAL sukhoi is going to cost less!!!

    Productivity alone doesn't answer for all questions on pricing.
     
  14. santosh

    santosh Major SENIOR MEMBER

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    @Averageamerican

    PD-AA, i discuss this issue in details as below :tup:

    =>
    Income-Debt-Buying Power comparison of Indians, British and Americans
    (in exchange rates terms)

    Per Capita income of US = $50,000 (around)
    Per Capita Income of UK = $38,000 (around)
    Per Capita Income of India = $2,000 (around)

    25 times difference
    .

    => Government Debt
    Government Debt per Capita in US = $18.5trillion for 310 million population = $60,000

    Government Debt per Capita in India = $1.2trillion for 1.25billion population = $1,000

    Government Debt per Capita in UK = $2.2trillion for 64million population = $34,000


    => "Total Debt" Per Capita of US = $60.5trillion for 310million population = $190,00 per person (around)

    "Total Debt" Per Capita of India = $2.8trillion for 1.25billion population = $2,500 per person (around)

    Total Debt Per Capita on UK = $12.0trillion for 64 million population = $190,000 per person (around)

    around 80 times higher


    => buying products in Market, would be around 8 to 10 times difference, as per my experience.

    coffee in India at 30 cents and in Sydney its $3.2 (10 times difference)

    something we usual buy, a mineral water for Rs15 (30cents) in Delhi, while it was around $2.4, the cheapest one, for a similar one liter mineral water in Sydney.....

    the cheapest Chinese take away food at $12 plus $2.0 for water, as compare to i pay around Rs90 ($1.5) a time here in Delhi

    renting flat in Sydney starts with around $350 per week, the cheapest, means around $1,500 per month, plus other charges. as compare to renting a flat in my city, Lucknow, at around Rs 20,000 a month ($300).

    parking in city, as you first drive to a shopping complex and then buy food whose prices isn't much different than India, for example. and similarly, even if you watch a movie, you pay dollar as compare to rupees in India.

    even mobile charge at around 30 paisa per minute in India, less than 0.5 cent, while its around 20 cents per minute in Australia....

    even for transportation, its around Rs 20 rupees(30 cents) in Delhi metro, as compare to minimum $3.5 one way in Perth-Sydney metro.....

    i would put "on ground" purchasing power difference at around 8 to 10 times between India and US. the prices which matters us, the prices of driving, renting, food, travelling, mobile etc.... :tup:

    hence, $2,000 'exchange rate term' per capita income of India would stand at around $15,000, using the factor of '7.5', as per its prices in US, for the what we buy-use the money on the ground, which affect the buying power of people.
    hence this way, we find per capita income of India at around $15,000, as compare to per capita income of around $50,000 and $38,000 in case fo US and UK respectively....


     
    Last edited: Apr 3, 2015
  15. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    Labour productivity in India, 15% of US productivity
    Mythili Bhusnurmath, ET BureauFeb 12, 2011, 03.08am IST
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    Despite rapid growth over the last decade, labour productivity in India is still much lower than in many other countries. According to the McKinsey Global Institute, 2001, it is only 15% of US productivity. There are also large variations in productivity levels within the country.
    Can these differences be explained by differing management practices? Economists have typically been sceptical about the importance of management on the grounds that competition will drive badly-managed companies out of the market. A second reason for their scepticism is the complexity of management, making it hard to measure. Recent work, however, has focused on specific management practices that can be measured, taught in B-schools and recommended by consultants.

    Bangalore: You must have read and heard enough about the IT industry in India. And why not? After all, it is one of the Indian industries which portray the contribution of human capital to the world. To decipher the point right, we need to analyze the position of Indian IT sector when it comes to productivity. According to a number of studies conducted by experts who have been scrutinizing the growth of the industry since years, it has been revealed that American techies are 10 times more productive than their contemporaries in India.

    Indian Techies vs. American Techies. Who is more productive? - Rapisource
     
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