Europe

Italy’s seasonally adjusted industrial output was much weaker than expected in January, falling 1.5 per cent after a revised 0.2 per cent increase the month before, data showed on Thursday. National statistics bureau ISTAT said the decline was mainly due to weakness in consumer and energy goods. The data contrasted with a 1 per cent monthly rise in French industrial output in January, and a 1.8 per cent increase in output in Germany, the euro zone’s largest economy. Germany, France and Italy make up at least two thirds of the eurozone’s economic output.

German exports unexpectedly fell 1 per cent in January, data showed on Thursday, in a slight setback for the key sector of Europe’s largest economy. The trade surplus fell to 11.8 billion euros from a revised 14.2 billion the month before, seasonally adjusted data from the Federal Statistics Office showed. Germans’ appetite for goods from abroad grew more than expected in the month, the trade data showed, with imports rising 2.3 per cent from a month earlier. Should imports continue to grow, it could bring a welcome boost to Germany’s euro zone partners, who sometimes complain Berlin is not doing enough to help domestic consumption.

Bosnia’s gross domestic product grew by O.9 percent last year, more than an earlier estimate of 0.5 percent, the central bank governor said on Thursday. Kemal Kozaric also said he expected 2011 inflation to come to 3 percent, up from 2.5 percent in 2010, and that non-performing bank loans rose to 9.6 percent in the last quarter of 2010, up from 5.9 percent in the same quarter of 2009.

Poland’s trade deficit stood at 0.1 billion euros ($138.7 million) in January, statistics data showed on Thursday. Exports in the first month of 2011 rose 17.3 per cent year-on-year to 9.34 bilion euros. Imports grew 9.0 per cent to 9.44 billion euros. In all of 2010, the trade gap, as calculated by the statistics office, reached 13.5 billion euros.

Greek consumer inflation decelerated to an annual rate of 4.4 per cent in February, topping the euro zone’s average in the same month by two percentage points.

US and Canada

The US Commerce Department said Thursday the January trade deficit increased 15.1 per cent to $46.3 billion. Exports rose 2.7 percent to an all-time high of $167.7 billion. But imports rose a faster 5.2 percent to $214.1 billion, reflecting a big jump in America’s foreign oil bill, and underscoring concerns that surging oil prices could slow the economic recovery.

Canada reported a much smaller-than-expected trade surplus in January as the Canadian dollar pushed imports up at a considerably faster pace than exports. The trade surplus shrank to just C$116 million ($118 million) in January, Statistics Canada said on Thursday, as the value of imports hit a two-year high.

Sales at US wholesalers outpaced inventories in January as companies remained cautious about the state of the economic recovery. The commerce department said sales rose 3.4 per cent to $387bn in January, faster than December’s revised gain of 1.1 per cent. That was the biggest rise since November 2009 and was well ahead of analysts’ expectations of a 0.5 per cent rise, helping sales jump 15.4 per cent from their January 2010 level.

US consumer spending rose modestly in January. The Commerce Department said on Monday spending edged up 0.2 per cent, the smallest increase in seven straight months of gains, after an upwardly revised 0.5 per cent rise in December.

Sales of previously owned US homes rose unexpectedly in January, but prices tumbled to the lowest in nearly nine years, an industry group said on Wednesday. The National Association of Realtors said sales climbed 2.7 per cent month on month to an annual rate of 5.36m units from a downwardly revised 5.22m.

Americas

Chile, the world’s top copper-producing nation, racked up strong growth of 1.3 per cent in January compared with December and surged 6.8 per cent compared with January 2010, far higher than the market had been expecting, according to central bank data published on Monday.

Chile also posted a $1.17bn trade surplus in February, virtually unchanged from a surplus of $1.16bn in February 2010, with exports growing 25.3 per cent year-on-year in the month and copper exports up 20.2 per cent compared with February 2010.

Surging domestic demand lifted Peru’s economy by 2.2 per cent in the fourth quarter from the third quarter and growth for 2010 was a blistering 8.8 per cent, official data showed on Monday, reflecting one of the world’s fastest paces.

Brazil’s current account deficit jumped in January from the year-ago period as the country’s strong currency underpinned appetite for foreign goods. Latin America’s largest economy ran a current account deficit of $5.409bn in January, the central bank said on Wednesday, compared with $3.821bn in the red in the same month last year. That was the country’s largest current account deficit since December 2009, the central bank said.

Consumer prices in Brazil picked up speed to mid-February from the previous month, posing a challenge to the government as it tries to curb inflation while avoiding further strengthening in its currency. Brazil’s benchmark IPCA inflation index rose 0.97 per cent in the month to mid-February, after a 0.76 per cent gain in the month to mid-January, government’s statistics agency IBGE data showed on Tuesday.

Asia

China reported a surprise trade deficit in February as surging prices for oil and other commodities pushed up its import bill. February export growth plunged to 2.4 per cent as businesses were idled for the week-long Lunar New Year holiday while imports of higher-priced oil and other goods rose 19.4 per cent for a deficit of $7.3 billion, data showed Thursday. For the January-February period, exports rose 21.3 percent to $247.5 billion while imports gained 36 percent $248.4 billion, for a deficit of $900 million.

Japan’s economy shrunk more than initially thought in the fourth quarter, the government said Thursday. Real gross domestic product contracted at an annualized rate of 1.3 per cent in the October-December period, worse than the negative 1.1 per cent growth reported in preliminary data last month. The annualized figure translates to a 0.3 per cent fall from the previous three-month period.

South Korea’s central bank lifted interest rates by a quarter percentage point on Thursday as expected, aiming to contain inflation expectations as buoyant exports and domestic spending put upward pressure on prices. A media official at the Bank of Korea said the monetary policy committee raised the 7-day repurchase agreement rate to 3 per cent, after it surprised markets by leaving rates unchanged in February.

Bangladesh’s central bank raised its key interest rates by half a percentage point on Thursday, stepping up its battle to clamp down on resurgent inflation. The bank said it raised the repo rate, which it uses to inject money into the banking system, to 6 per cent, and increased the reverse repo rate, through which it absorbs excess cash from banks, to 4 per cent, effective from March 13. The move came after annual inflation rate accelerated to 9.04 per cent in January from 8.3 per cent the previous month, mostly due to steep rise in food prices. Food inflation in January was 11.9 per cent, the highest since Sept. 2008.

Kazakhstan’s central bank raised its key refinancing rate by 50 basis points on Wednesday, the first revision of the rate in 18 months, in a move designed to stem accelerating inflation in central Asia’s largest economy. As the central bank raised its refinancing rate to 7.5 per cent with immediate effect, Grigory Marchenko, the governor, said the bank would consider raising its full-year inflation forecast from the current range of between 6-8 per cent.

Middle East and Africa

Israel’s economy grew at an annualised 7.7 per cent in the fourth quarter of 2010 for its quickest pace in four years, close to an initial estimate and keeping pressure on the central bank to raise interest rates further. Gross domestic product grew 4.6 percent for all of 2010 to 106.5 billion shekels ($227 billion), beating a government estimate of 4.5 per cent, the Central Bureau of Statistics said on Thursday. It was the highest growth rate of all Western countries with the OECD average at 2.8 percent.

Higher fuel prices pushed inflation in Ghana higher in February for the second month in a row, according to data on Wednesday that heightened speculation over a possible monetary tightening. Annual inflation rose to 9.16 per cent from 9.08 per cent in January, the second monthly rise after 19 months of falls. It was expected after the government implemented a 30 percent hike in the price of petrol in January to boost tax revenues.

Zambia’s headline consumer inflation was 9.0 per cent year-on-year in February, flat from 9.0 per cent in January, which was an eight-month high, the Central Statistics Office said. The CSO said rents and household energy costs contributed most to overall inflation. But the inflation data does not yet reflect a domestic fuel price increase of more than 11 per cent announced in mid-February.

South Africa’s economic growth came in higher than expected in the fourth quarter, boosted by stronger growth in the mining and agricultural sectors, according to data. Statistics South Africa said the economy grew by 4.4 per cent in the fourth quarter on a seasonally adjusted and annualised basis, compared with an upwardly revised 2.7 per cent. The market was expecting a 4.2 per cent rise.

The Bank of Israel raised its benchmark lending rate by a quarter point for a second straight month, citing the need to contain inflation and cool the fast-growing economy. The increase in the key rate to 2.5 per cent was expected – with all 20 economists in a Reuters poll expecting the move – and was the eighth such rise since August 2009.

Bahrain’s inflation eased to 0.6 per cent year-on-year in January, its lowest level since at least 2007, and prices grew 0.3 per cent from the previous month on a rise in transport costs, data from the Central Informatics Organisation showed.

Financial Times