A look at economic developments around the globe

AP News
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Posted: Nov 30, 2009 1:21 PM

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

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DUBAI, United Arab Emirates _ The heavily indebted Dubai World is not guaranteed by the emirate's government, a top financial official from the city state said Monday, offering little direction to anxious investors on a day when stock markets in the United Arab Emirates registered a record fall on the back of Dubai's debt mess.

On the first day of trading since news of Dubai World's debt crunch became public, Dubai's main stock exchange dropped more than 7 percent while the Abu Dhabi exchange fell more than 8 percent _ the steepest fall in at least a year, according to brokers.

Driving the financial avalanche was Wednesday's announcement that conglomerate Dubai World would seek an at least six month reprieve on its $60 billion in debts, obligations amassed during years of a building spree that turned the desert emirate into the Middle Eastern version of Las Vegas.

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TOKYO _ Growth in Japan's factory output stumbled in October, falling short of expectations and adding another kink to the country's fragile recovery.

Industrial production _ a key barometer of Japan's economic health _ edged up 0.5 percent from September, the government said Monday. Output rose 2.1 percent in September from August.

The result missed a 2.5 percent increase forecast in a Kyodo News agency survey of economists, as well as the government's estimate for a 3.1 percent gain.

The government said factory production "continues to show an upward movement." But the underwhelming figure suggests that the world's second biggest economy may be losing steam as stimulus spending tapers off. Add to that fresh worries about deflation and a strong yen _ a dangerous duo that threatens to derail growth.

Even so, in Asia, nearly every market traded higher as concerns about a possible default in Dubai were soothed by a pledge from the United Arab Emirates' central bank that it will stand behind local and foreign banks. Japan's Nikkei 225 stock average climbing 264.03 points, or 2.9 percent, to 9,345.55. Hong Kong's Hang Seng added 687.00 points, or 3.3 percent, to 21,821.50 and South Korea's Kospi added 2 percent to 1,555.60.

Elsewhere, Shanghai's market climbed 3.2 percent, Australia's index was 2.8 percent higher and Taiwan's benchmark rose 1.2 percent.

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MUMBAI, India _ India's economy grew 7.9 percent in the July-September period, the fastest pace in six quarters, bolstered by government stimulus measures and rising industrial production.

The upsurge suggests that Asia's third largest economy could be emerging faster from the global slowdown than many expected, despite agriculture being hit by drought. The upswing is likely to encourage the central bank to proceed with gradual monetary tightening.

The economy grew 6.1 percent in the April-June quarter.

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LONDON _ Britain's battered mortgage market is slowly recovering but consumer lending remains low as banks and building societies are reluctant to hand out overdrafts and loans.

Bank of England data showed the number of mortgage approvals rose in October for the 11th month in a row.

Net mortgage lending rose by 922 million pounds ($1.5 billion) in October, compared with 898 million pounds in the previous month.

The Bank of England figures also show consumers continued to repay outstanding loans, credit card debts and overdrafts. They repaid a record 579 million pounds during October, the biggest contraction of unsecured lending since the Bank of England began keeping records like this in 1993.

The Building Societies Association also said customers are drawing more heavily on their savings. They withdrew 1.24 billion pounds more than they paid into building society accounts for the eighth month in a row.

In European markets, the FTSE 100 index of leading British shares closed down 55.05 points, or 1.1 percent, at 5,190.68 while Germany's DAX ended 59.66 points, or 1.1 percent, lower at 5,625.95. The CAC-40 in France was 41.30 points, or 1.1 percent, lower at 3,680.15.

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GENEVA _ A decade after the 'Battle in Seattle', the United States, China and other top commercial powers gathered once again with tear gas lingering in the streets to assess what role trade can play in spearheading global economic growth.

The arguments in favor and against an international trade liberalization deal remain the same, with supporters saying an agreement to cut tariffs and subsidies would pump billions of dollars into the world economy and help millions of people lift themselves out of poverty.

Opponents say freer trade could worsen global inequality, unless rules are designed specifically to help poorer nations prosper and not multinational companies.

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NANJING, China _ Summit talks between Chinese and European leaders ended on an off key note as Premier Wen Jiabao rejected calls for a stronger Chinese currency and accused critics of seeking to undermine his country's rise.

The one-day summit with the 27-member European Union was the most substantive dialogue between China and its largest trading partner, a market of more than 500 million people, in more than two years.

China and the EU should rise above their differences, Wen said, before launching into a staunch defense of currency policies that European leaders say are pressuring the region's exporters, possibly endangering the economic recovery.

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LONDON _ Consumer prices in the 16 countries that use the euro rose by 0.6 percent in the year to November, the first annual increase since April.

The EU's statistics office Eurostat did not provide any reasons behind the estimated increase from October's 0.1 percent fall. More details will emerge in December, when Eurostat publishes a more complete picture of inflation during the month.

Prices have fallen since May as deflationary pressures dominated during Europe's worst recession since World War II.

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WARSAW, Poland _ Poland's economy grew by 0.5 percent in the third quarter compared with the previous three months.

The annual rate of economic expansion accelerated to 1.7 percent from 1.1 percent in the second quarter, the Central Statistical Office said.

Poland's economy has suffered less from the global economic crisis than many of its neighbors. It is the only major European nation that avoided recession during the global downturn.

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NEW YORK _ The world economy will start growing again in 2010 but emerging markets will accelerate at a much faster rate than the U.S and Europe, due in part to continued frugality among Western consumers.

Research group The Conference Board said world gross domestic product, a measure of overall economic performance, will grow 3.5 percent next year and ramp up to more than 4 percent in 2011.

The group predicts global GDP could accelerate to 4.2 percent from 2011 to 2016. That would be just shy of the 4.3 percent growth the global economy averaged from 2000 to 2008, marking an impressive recovery after one of the worst financial meltdowns of the last century.

But it will also signal a shift in how economic growth is distributed around the globe _ developing countries will make up as much as two-thirds of global GDP by 2016, up from 52 percent today and a complete reversal from a decade ago.

And while China will be an important part of the unwinding of the global financial crisis, its growth rate may be overtaken by nations such as India as China's export-driven economy matures and shifts toward domestic consumption.