Issue 14 | February 3 , 2012
 

South Korea experiences trade deficit
In January, South Korea posted its first trade deficit in two years. This marks slowing momentum for the export-reliant South Korean economy. Since January 2011, imports rose 3.6 percent, creating a deficit of $1.96 billion. South Korea had posted a $2.9 billion surplus a year before. Inflation, however, fell slightly due to Korean efforts to combat rising prices.

The EU Blocks NYSE and Deutsche Börse merger
The planned merger between the NYSE Euronext and Deutsche Börse is to be called off due to opposition from the European Commission. The European Union competition commissioner expressed that the merger would have created a near-monopoly in the European financial derivatives market. Supporters of the merger say the restrictions prevent the European economy from remaining competitive in the global market.

Oil prices could increase 20-30 percent if sanctions placed on Iran, IMF warns
The International Monetary Fund warned that if western nations place financial sanctions on Iran, it would likely cause a major spike in oil prices. Iran could not only cut off its supply of oil, but also close the Straits of Hormuz to oil exports. Iran is the fifth-largest oil producer worldwide, and approximately 40 percent of the world’s oil exports travel through the Straits of Hormuz.

U.S. manufacturing surges at fastest rate since June
A rise in new consumer and business orders boosted American manufacturing in January. Growth rose to 54.1 on the Institute for Supply Management index, up from 53.1 in December. This marks 29 straight months of expansion for the manufacturing sector. While this growth supports a more optimistic outlook, experts warn that U.S. factories are still vulnerable to economic instability.

United States and Saudi Arabia seek to strengthen and expand trade relationship
During the second meeting of the U.S.-Saudi Arabia Trade and Investment Council, representatives discussed plans for expanding the U.S.-Saudi Arabia trade relationship. Such plans include actions to increase the protection and enforcement of intellectual property rights, open opportunities for government procurement, and improve stakeholder engagement in the development of standards and regulation, according to the United States Trade Representative’s office.

IMF decreases growth forecast for all but United States
The International Monetary Fund has decreased its expected growth for the global economy from 4 to 3.3 percent. This occurred in response to growing risks surrounding the European debt crisis. Although the global growth outlook was diminished, the United States was the only country whose forecast was not lowered. The IMF still predicts that the U.S. economy will grow 1.8 percent in 2012.

Exports found to drive U.S. economic growth more than ever before
The 2011 estimates of American economic performance, released Jan. 27, showed that foreign buyers purchased more than $2 trillion in goods and services, a record high. Those exports also accounted for approximately 14 percent of the GDP. This growth can be attributed to the decline of the dollar’s value, which makes American products and services less expensive for foreigners to buy. Despite that fact, these high export numbers mark a positive trend in U.S. economic progress.