A look at economic developments around the globe

AP News
|
Posted: Nov 20, 2009 1:18 PM

A look at economic developments and activity in major stock markets around the world Friday:

___

LONDON _ World stock markets fell amid mounting concerns about the pace of the U.S. economic recovery following a disappointing earnings update from computer maker Dell Inc. After being higher earlier in the day, the FTSE 100 index of leading British shares closed down 16.29 points, or 0.3 percent, at 5,251.41, while Germany's DAX fell 39.03 points, or 0.7 percent, to 5,663.15. The CAC-40 in France was 30.12 points, or 0.8 percent, lower at 3,730.10.

___

MEXICO CITY _ Rising oil prices and increased exports are slowly dragging Mexico's economy out of a severe recession, but the nation's financial system still confronts fundamental challenges, national leaders and experts said. Deputy Finance Minister Alejandro Werner said he expects the Mexican economy to grow by about 3 percent in 2010, a huge improvement from a 7.5 percent drop in 2009. The Mexican government planned to release official economic figures that reflect the start of an economic rebound. But Nobel Prize-winning economist Joseph Stiglitz, in a series of recent speeches, said Mexico's leaders are failing to address serious flaws in their economic system, including many monopolies and a tight-budget spending plan.

___

ATHENS, Greece _ Greece's new center-left government pledged to pull the economy out of "intensive care," but conceded that public debt would continue to surge, reaching a massive 120 percent of annual national output next year. The Socialist party's draft 2010 state budget aims to trim government spending and cut the deficit to 9.1 percent of gross domestic product _ amid fierce pressure from the European Union to improve public finances. While still three times the EU deficit ceiling of three percent of GDP, the target is significantly lower than the 12.7 percent figure forecast for 2009. The draft budget foresees the economy starting to expand again toward the end of 2010 _ when it will shrink by 0.3 percent _ after a 1.2 percent contraction this year.

___

KUALA LUMPUR, Malaysia _ Malaysia's economy shrank 1.2 percent in the third quarter, an improvement from the previous two quarters as the financial services and construction sectors gained strength, the government said. The year-on-year fall in gross domestic product came amid declines in key sectors such as manufacturing, which dropped 8.6 percent, and mining, which slid 3.5 percent, the Department of Statistics said in a statement. But it was a more moderate contraction compared with the 6.2 percent drop in the first three months of 2009 and 3.9 percent in the second quarter, the statement said.

___

FRANKFURT _ German producer prices fell 7.6 percent in the year to October, due mainly to cheaper fuel and energy, but were unchanged from September, official data showed. Producer prices _ the cost of items at the factory gates _ are watched as an early indicator of consumer price inflation as they affect the cost of manufacturing goods. The Federal Statistical Office in Wiesbaden said natural gas was nearly 40 percent cheaper and oil-based fuels were 12 percent cheaper in October 2009 compared with October 2008. Electricity prices were about 10 percent lower. Metal prices were down almost 18 percent, while prices for components for manufacturing were 6 percent lower.

___

TOKYO _ Japan's government highlighted the danger of deflation for the first time in three years, warning that falling prices and a further worsening of the labor market could drag on the weak recovery. Meanwhile, the country's central bank, which kept its key interest rate on hold at 0.1 percent, took a slightly more upbeat view in its monthly assessment of the economy because of an improvement in exports and private consumption. Japan's Nikkei stock index fell to a four-month low, pressured by uncertainty over the government's handling of the deflation-plagued economy. The benchmark Nikkei 225 stock average lost 51.79 points, or 0.5 percent, to 9,492.74, the lowest finish since July 17 when the key index closed at 9,395.32. It also marked the fourth consecutive day of decline. During the week, the Nikkei index lost 2.8 percent. The broader Topix edged up 0.1 percent to 838.71.

___

SHANGHAI _ Chinese shares ended mixed after a five-day rally on electricity price increases, but finished the week up 3.8 percent. The benchmark Shanghai Composite Index shed 12.27 points, or 0.4 percent, to close at 3,308.35, while the Shenzhen Composite Index for China's second exchange added 0.5 percent to 1,208.82. China raised electricity rates for businesses and industries, part of a long-term effort to adjust prices to reflect costs and promote energy saving as the country struggles to meet soaring demand. Resource shares and big electricity consumers fell on rising production costs, while power generators were heartened by the news of possible higher profits.