Economy

MADRID (Reuters) – Spanish industrial prices rose 0.9% in the 12 months through November, after a 3.9% decrease in the 12 months through October, the National Statistics Institute (INE) said on Thursday.Industrial prices rose 2.7% in November from October, INE said. More

The world’s second-biggest economy has struggled this year, mainly due to a property crisis and tepid domestic demand. An expected hike in U.S. tariffs on its goods when U.S. President-elect Donald Trump takes office in January may also hit growth.”Addressing challenges in the property sector, strengthening social safety nets, and improving local government finances will be essential to unlocking a sustained recovery,” Mara Warwick, the World Bank’s country director for China, said. “It is important to balance short-term support to growth with long-term structural reforms,” she added in a statement. Thanks to the effect of recent policy easing and near-term export strength, the World Bank sees China’s gross domestic product growth at 4.9% this year, up from its June forecast of 4.8%.Beijing set a growth target of “around 5%” this year, a goal it says it is confident of achieving. Although growth for 2025 is also expected to fall to 4.5%, that is still higher than the World Bank’s earlier forecast of 4.1%.Slower household income growth and the negative wealth effect from lower home prices are expected to weigh on consumption into 2025, the Bank added. To revive growth, Chinese authorities have agreed to issue a record 3 trillion yuan ($411 billion) in special treasury bonds next year, Reuters reported this week.The figures will not be officially unveiled until the annual meeting of China’s parliament, the National People’s Congress, in March 2025, and could still change before then.While the housing regulator will continue efforts to stem further declines in China’s real estate market next year, the World Bank said a turnaround in the sector was not anticipated until late 2025.China’s middle class has expanded significantly since the 2010s, encompassing 32% of the population in 2021, but World Bank estimates suggest about 55% remain “economically insecure”, underscoring the need to generate opportunities.($1=7.2992 Chinese yuan renminbi) More

SINGAPORE (Reuters) -Asia shares eased in holiday-thinned trade on Thursday, paring some of their gains from earlier in the week, while the dollar rose alongside U.S. Treasury yields.As the year-end approaches, trading volumes have begun thinning out and the main focus for investors remains that of the Federal Reserve’s rate outlook. Markets in Hong Kong, Australia and New Zealand were closed for a holiday on Thursday.Since Fed Chair Jerome Powell primed markets for fewer rate cuts next year at the central bank’s last policy meeting of the year, traders are now pricing in just about 35 basis points worth of easing for 2025.That has in turn lifted U.S. Treasury yields and the dollar, with the greenback’s renewed strength a burden for commodities and gold.The benchmark 10-year yield ticked up 2.6 basis points to 4.613% and is up roughly 40 basis points for the month thus far. The two-year yield similarly firmed to 4.3489%. [US/] “Given December’s hawkish cut, we believe the Fed will skip at the January FOMC meeting and wait for more data before definitely resuming, or potentially ending, this cutting cycle,” said Tom Porcelli, chief U.S. economist at PGIM Fixed Income.”Given the Fed’s shift to less accommodation paired with continued focus on both sides of the dual mandate, we believe the market will have more intense emphasis on economic events in the new year.”In currencies, the dollar was perched near a two-year high against a basket of currencies at 108.15 and was on track for a monthly gain of more than 2%.The Australian and New Zealand dollars were, meanwhile, among the biggest losers against a dominant greenback on Thursday, with the Aussie falling 0.5% to $0.6238. The kiwi slid 0.58% to $0.5646.The euro eased 0.18% to $1.0399, while the yen languished near a five-month low and last stood at 157.35 per dollar.Japan is set to raise scheduled sales of Japanese government bonds (JGB) slightly to 172.3 trillion yen ($1.1 trillion) next fiscal year, the first increase in four years, according to a draft plan seen by Reuters.Yields on JGBs barely reacted to the news, but were similarly higher on the day in line with their U.S. peers. [JP/]ENDING ON A HIGHMSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.1% but was still headed for a weekly rise of about 1.6%, taking a cue from its counterparts on Wall Street earlier in the week.S&P 500 futures edged 0.08% higher, while Nasdaq futures advanced 0.27%.World stocks looked set to end the year on a high with a second consecutive annual gain of more than 17%, unfazed by escalating geopolitical tensions and various economic and political headwinds globally.That is mostly thanks to a second year of huge gains for shares on Wall Street as artificial intelligence fever and robust economic growth sucked more global capital into U.S. assets.”At first glance, markets appear to suggest exceptional exuberance has presided over 2024,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho (NYSE:MFG) Bank.”Notably, U.S. bulls high on American exceptionalism have not trampled on ebullience elsewhere.”Japan’s Nikkei jumped 0.95% and was on track to end the year with an 18% gain. (T)China’s CSI300 blue-chip index ticked up 0.08%, while the Shanghai Composite Index advanced 0.14%, with both headed for yearly gains of more than 10% each, helped by a step-up in support from Chinese authorities in recent months to shore up an ailing economy.Elsewhere, bitcoin fell 0.37% to $98,071, extending its decline from a record high above $100,000 on the back of the Fed’s hawkish repricing.Russian companies have begun using bitcoin and other digital currencies in international payments following legislative changes that allowed such use in order to counter Western sanctions, Finance Minister Anton Siluanov said on Wednesday.In commodities, Brent crude futures rose 0.08% to $73.64 a barrel, while U.S. crude gained 0.1% to $70.17 per barrel. [O/R]Spot gold ticked 0.5% higher to $2,626.19 an ounce. [GOL/] More

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Japan’s output gap, which measures the difference between an economy’s actual and potential output, is likely to stand at +0.4% in the fiscal year starting in April, according to an estimate released by the Cabinet Office.A positive output gap occurs when actual output exceeds the economy’s full capacity, and it is considered a sign of strong demand.With Japan’s labour force at a plateau of about 69 million workers, labour shortages are likely to restrict supply, the Cabinet Office said.Japan’s output gap slipped into the negative territory in fiscal 2019, falling to as low as -4.5% in fiscal year 2020 during the pandemic.It is among data the Bank of Japan watches closely in determining whether the economy is expanding strongly enough to propel a demand-driven rise in inflation.The Cabinet Office expects growth in the overall consumer price index, which includes fresh food prices, to slow to 2% in the next fiscal year from 2.5% this year. More

This data follows the central bank’s unexpected decision last week to maintain its key interest rate at 21%. The regulator said recent tightening has created conditions conducive to reducing inflation towards its target of 4%.The agency indicated that seasonally volatile prices for fruit and vegetables contributed significantly to the overall increase, with cucumber prices rising by 8.3% and tomato prices by 1.9% in just one week.Among less seasonally sensitive foods, the price of eggs increased by 1.7%, and frozen fish by 1.4%. The central bank had initially estimated this year’s inflation at a maximum of 8.5%.The central bank’s monetary policy department’s head Andrei Gangan told the Interfax news agency on Dec. 24 that full-year inflation will be between 9.6% and 9.8%.Inflationary expectations among households for the coming year also reached 13.9% in December, the highest level since the beginning of the year.In a report on its inflationary expectations survey, the central bank said respondents were most concerned about rising prices for milk, dairy products, eggs, meat, and fish. It also said respondents have begun to notice increases in the prices of home appliances and electronic devices. More