Friday, February 12, 2010

China Tightens and Europe Slows

by Bill McBride on 2/12/2010 09:15:00 AM

From Bloomberg: China Raises Bank Reserve Requirement to Cool Economy

China ordered banks to set aside more deposits as reserves for the second time in a month to cool the fastest-growing economy after loan growth accelerated and property prices surged.

The reserve requirement will increase 50 basis points, or 0.5 percentage point, effective Feb. 25, the People’s Bank of China said on its Web site today. The current level is 16 percent for big banks and 14 percent for smaller ones.
And from Eurostat: Euro area and EU27 GDP up by 0.1%
GDP increased by 0.1% in both the euro area1 (EA16) and the EU271 during the fourth quarter of 2009, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union. In the third quarter of 2009, growth rates were +0.4% and +0.3% respectively.
Germany's economy stalled (no change), and Latvia saw the biggest decline (-3.2%).

And Greece's economy shrunk by 0.8%, possibly exacerbating the Greek debt crisis.

Note: Europe numbers are quarter-to-quarter. In the U.S. the GDP is annualized.