Trump Insists US Economy Not In Trouble

US President Donald Trump gestures as he speaks to the press on the South Lawn of the White House before departing in Washington, DC on August 9, 2019. Nicholas Kamm / AFP

 

President Donald Trump is so convinced that his reelection depends on the economy staying strong that the merest hint of the recession has sent him into political crisis management mode.

Unpopular and with a middling record of legislative achievements, Trump enters the 2020 campaign season facing significant headwinds — except on the economy.

Growth has been on the upside for a decade now and Trump takes all the credit that he can for record low unemployment and what he repeatedly claims to be “the hottest” economy in the world.

But what he doesn’t want to talk about is the bad news — and that’s starting to accumulate.

An alarm bell went off in the US Treasury bond market last week when 10-year bond yields briefly fell below the yields offered on a two year-bond — the inverse of what normally happens.

The so-called “inverted yield curve” is a statistical phenomenon that has previously been an accurate herald of eventual recession.

Add in growing fears of fallout from the US-China trade war and Germany’s own recession warning, plus Britain’s Brexit chaos, and suddenly the “R” word has become a regular part of the conversation.

Unless your name is Donald Trump.

In his world, there can be no economic shrinkage.

Just on Tuesday morning, he tweeted or retweeted more than a dozen boasts about the booming economy.

“#Trump has this Economy humming like a fine-tuned engine,” one of the retweets claimed while crediting the president with “Super Human-like Energy.”

Trump’s aides have also been inundating the media with interviews where they repeat this same line.

“Let’s not be afraid of optimism,” as White House economics guru Larry Kudlow said on Sunday.

 Blame game 

Trump, though, is spooked.

How can you tell? He’s already blaming people for the recession he says won’t happen.

Target number one is the Federal Reserve, which Trump, in one of his many breaks with convention, has been browbeating for months over its reluctance to cut interest rates.

Last week, the president branded Fed chief Jerome Powell “clueless,” and tweeted in all caps: “CRAZY INVERTED YIELD CURVE!”

Villain number two is the US media, which Trump and his aides accuse of trying to whip up recession fears deliberately to hurt him.

“They’re pushing a recession lie. The fact is, so many on the left want these horrible things to be true,” Trump deputy spokesman Hogan Gidley said on Fox News Tuesday.

Tax cut solution? 

A survey by the National Association for Business Economics on Monday showed that 72 per cent of economists believe there’ll be a downturn before the end of 2021, with about half of them predicting the recession for 2020, in time for Trump’s reelection battle.

And despite claiming that nothing’s broken, Trump is already rummaging around the toolbox.

Senior White House officials are mulling several moves to stimulate the economy including temporarily cutting the payroll tax to increase workers’ monthly take-home pay, The Washington Post reported.

Also under consideration is reversing new tariffs the Trump administration imposed on Chinese goods, according to The New York Times.

The White House doesn’t want to project concern, but Gidley confirmed that some kind of action may indeed be in the works.

“He’s looking at tax cuts again,” Gidley said. “He’s looking at all options out there.”

AFP

Germany Warns Of Possible Recession

 

The German economy could enter a recession in the third quarter, the Bundesbank warned Monday, as the debate on government measures to support the economy swelled in Berlin.

“The economy could contract again slightly” this summer, Germany’s central bank said in its monthly report, following a 0.1-per cent decline in gross domestic product (GDP) in the second quarter.

“According to data currently available, industrial production is expected to shrink markedly in the current quarter as well.”

Having seen a decline in trade against the backdrop of the US-China trade war, two of its main customers, Europe’s biggest economy will enter what it technically defines as a recession should GDP shrink further.

Alarmist signals are reviving the political debate between those who support the German government’s dogma of balanced budgets and those seeking more flexibility in order to revive the economy.

Germany can afford it on paper after five consecutive years of budget surpluses and interest rates for long-term loans that are extremely attractive to the federal government.

As US-China tensions intensify, economists have urged Berlin to fork out cash to avoid a recession, but Chancellor Angela Merkel’s government has previously said things were not yet bad enough to warrant loosening the purse strings.

Balanced Budget

Citing anonymous sources, Der Spiegel news magazine said Friday that the government “had no intention of continuing to set aside money in the event of a recession”.

That would mean abandoning the so-called “black zero” doctrine committing the German state to a balanced budget.

On Sunday, German Finance Minister Olaf Scholz hinted at a potential intervention, stating that Germany could “fully face up to” a new economic crisis.

“It is sometimes important, when things change completely, for example, for us to have enough strength to react,” he said during an open house day at government offices.

“If we have debt in Germany that is less than 60 per cent of our GDP, that is the strength we need to stand up to a crisis,” he added.

Scholz pointed to the estimated 50 billion euros ($55 billion) that the 2008-09 financial crisis had cost the German government.

“We have to be able to muster that and we can muster that –- that’s the good news.”

In particular, several Social Democrats, junior partners in Merkel’s coalition government, want Germany to draw on its reserves to finance a plan to combat global warming or infrastructure works.

Flexibility instruments could enable Berlin to draw on its large budget surplus of 1.7 per cent of its GDP as early as September.

Merkel’s conservatives have so far resisted and abandoning the popular balanced budget stance seems unlikely with major regional elections looming in September and October.

FEC Pleased As Budget Minister Reveals 2018 GDP Growth

 

The Federal Executive Council on Wednesday received a report detailing the growth of the nation’s GDP in the third quarter of 2018.

After the meeting presided over by President Muhammadu Buhari, the Minister of Budget and National Planning, Udo Udoma, told journalists that the council was encouraged by the economy’s steady recovery from recession.

He also noted that the economic growth continues to be driven by the non-oil sector which grew by 3.32 per cent in the third quarter.

Read Also: Significant Growth In Non-Oil Sector Is Creating Thousands Of Jobs – Buhari

The nation had entered into a recession in 2016, according to statistics by the National Bureau of Statistics (NBS).

Consequently, the cost of basic amenities soared, as the value of the naira depreciated compared to the dollar – a situation which caused hardship for the majority of Nigerians.

With pressure being mounted on government, the need to diversify the economy and focus on the non-oil sector became inevitable.

After various efforts, the nation exited the recession in 2017.

The presidency, however, promised that it won’t rest until the impact of the nation’s new economic status is being felt by all Nigerians.


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Exit From Recession: We Won’t Rest Until All Nigerians Feel The Impact – Buhari

Nigeria’s Environment Minister, Ibrahim Jibrin Resigns


 

Meanwhile, the Minister of State for Environment, Ibrahim Jibrin, has resigned from the federal cabinet.

His resignation was announced during the FEC meeting on Wednesday, after which a valedictory session was held in his honour.

South Africa Exits Recession Ahead Of 2019 Polls

Cyril Ramaphosa Photo: Glyn KIRK / AFP

 

South Africa broke free of recession on Tuesday when it reported GDP growth of 2.2 percent for the third quarter, the statistics authority said, marking a positive economic trajectory ahead of elections. 

President Cyril Ramaphosa, who took power in February, has pledged to revive the listless economy ahead of polls due in May by attracting $100 billion in foreign investment and by fighting corruption.

The growth, which contrasted sharply with the second quarter’s 0.4 percent contraction, was driven by a surge in the manufacturing, agriculture and transport sectors, Stats SA said in a statement.

The announcement follows a strong week for the local rand currency which has benefited from a detente in the United States’ trade war with China.

The Rand currency was the second strongest performing of all developing countries against the dollar since Friday, gaining 1.81 percent according to Bloomberg.

Lukman Otunuga, an analyst at FXTM foreign exchange, said in a note to investors that the country’s exit from recession would boost “confidence over the South African economy and investor appetite towards the rand”.

The purchasing managers’ index published by Absa’s Bureau for Economic Research on Monday showed that factory orders had bounced back from a 15-month low.

Manufacturing was up 7.5 percent in the third quarter compared to the second, Stats SA said.

But Finance Minister Tito Mboweni’s mid-term budget statement delivered in October slashed South Africa’s 2018 growth forecast from 1.5 percent to 0.7 percent.

Mboweni is the country’s fifth finance minister in three years after his respected predecessor Nhlanhla Nene resigned in October.

The country’s economic performance is seen as crucial to bolstering the ruling African National Congress’ standing ahead of national polls due in May 2019.

Voters have been buffeted by soaring fuel prices and a weak local currency while unemployment is stubbornly high at about 28 percent — rising to over 50 percent for young people.

AFP

Keyamo Defends FG, Says Buhari’s Govt Not Responsible For Recession

 

 

The Spokesman for the President Buhari Campaign Organisation, Mr Festus Keyamo, has said the current administration is not to be blamed for economy thrown into recession.

Keyamo stated this on Monday while appearing as a guest on Channels Television’s breakfast show, Channels Television in Abuja, the nation’s capital.

“Nobody should wake up because of political reasons and say that it was when this government came on board that we slipped into recession,” he said.

Keyamo, who is also a Senior Advocate of Nigeria, argued that President Muhammadu Buhari inherited the recession from the previous administration in 2014.

He explained that the Federal Government also inherited about 24 states that were considered bankrupt following their inability to pay salaries in 2015.

He added, “At the point of handover in 2015, 24 states were almost bankrupt and could not pay salaries. Federal Government was borrowing to pay salaries at that point.

“The naira had begun the downward slide and at the time they handed over, it was N225 to a Dollar. So these are clear indices that there was something wrong and that we were headed to the bottom of a slope.”

Keyamo’s defence was in reaction to comments made by a former Vice President of the World Bank, Mrs Oby Ezekwesili, who blamed Nigeria’s recession on the failure of this current administration to initiate good economic policies.

Ezekwesili who also spoke to Channels Television on Monday said the economy would not have slipped into recession if the Federal Government had been proactive.

She said, “ If you did the right economic policies at that time, you would have averted the recession.”

While giving an assessment of the President Muhammadu Buhari’s administration three years into office, she added, “Much other oil producing and exporting countries managed to avert the recession.”

Recession Would Have Been Averted With Good Policies, Ezekwesili Criticises FG

 

The Convener of Red Card Movement, Mrs Oby Ezekwesili, has criticised the Federal Government for failing to come up with the right economic policies that plunged Nigeria into recession in 2014.

She stated this on Monday when featuring as a guest on Channels Television’s breakfast show, Sunrise Daily in Abuja, the nation’s capital.

“If you did the right economic policies at that time, you would have averted the recession.”

Ezekwesili, who is also a former Vice President of World Bank and a former Minister of Education said Nigeria did not act fast like some other oil-producing countries.

While giving an assessment of the President Muhammadu Buhari’s administration three years into office, she added, “Much other oil producing and exporting countries managed to avert the recession.”

The former Education Minister said that although the recession era is over, its effect is still being felt by the citizenry.

One of the effects, she stated, was the prevailing level of poverty most Nigerians were subjected to, just as the National Bureau of Statistics (NBS) put the poverty level at 60 percent.

“It (recession) costs us considerably huge effect on the populace. The truth is that we don’t yet have poverty number from the NBS. When you have the kind of shock that the combination of oil shock collapse and poor economic response to it occasioned, you would have dropped many more of your citizens into poverty.

“Considering the last data that we know of poverty rate from the NBS it is something in the neighbourhood of 60 percent, hundreds of millions of your citizens are poor. You don’t want to take any economic activity that would improve those numbers because that is disastrous,” she stated.

Ezekwesili also advised the Federal Government to initiate good economic policies that would attract investors into the country.

In doing that, she explained, the government needs to build confidence both in the minds of marketers, investors and consumers.

As the nation marks the democracy day celebrations on Tuesday (tomorrow), Nigerians expect better opportunities in terms of job creation, secured atmosphere, good health care delivery system, among several others.

Unbridled Corruption Led Nigeria Into Recession – Osinbajo

Unbridled Corruption Led Nigeria Into Recession - Osinbajo
File photo

The Vice President, Professor Yemi Osinbajo, has attributed the economic recession recently witnessed in Nigeria to the unchecked rate of corruption.

Professor Osinbajo stated this on Monday in Abuja at the House of Representatives Summit on Economic Recovery.

He said, “Unbridled corruption and waste are critical among reasons why Nigeria went into recession; corruption is the most outrageous factor.”

“There are problems of intractable budgetary delays and long procurement process which means money won’t flow into the economy,” he added.

Professor Osinbajo, however, commended the support of the National Assembly, noting that the Presidential Enabling Business Environment Council (PEBEC) was a collaborative effort with the legislature and private sector.

Nigeria’s Economic Growth Is Fragile – MPC

Amidst news about Nigeria’s exit from recession, the Central Bank Governor (CBN), Godwin Emefiele has called for the implementation of policies that will sustain Nigeria’s economic growth due to the fragile state of the growth.

This call was made during the Monetary Policy Committee (MPC) bi-monthly meeting on Tuesday.

During the meeting, the CBN Governor said the committee applauded Nigeria’s exit from recession but the growth needs to be sustained as it is fragile.

“Committee applauded the exit of the Nigerian economy exit from recession but observes that the growth remain fragile and therefore hopes that complimentary fiscal and monetary policies would sustain the growth momentum.”

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Also, the MPC during the meeting opted to leave the interest rates unchanged and focus on the slow economic growth in spite of the country’s exit from recession.

Due to the need to encourage liquidity of Nigeria’s economic system, the MPC retained the basic interest rate at 14 percent.

Emefiele during the meeting said the MPC is satisfied with the Federal Government’s directive that all state governors should pay outstanding salaries.

He said, “MPC also noted with satisfaction, the directive of the Federal Government to all states to promptly pay outstanding salary arrears in order to boost aggregate demand.

“It commended efforts to clear outstanding contractor arrears, prompt settlement of trade disputes with certain unions of organized labours, including the Academic Staff of Universities (ASUU) and health workers, as well as the of money to settle outstanding entitlement of the extra workers in defunct Nigerian Airways.”

FG Targets 2.5% Economic Growth By 2018

Arewa/Biafra Threats: Do Not Panic, Lai Mohammed Tells Nigerians
Mr Lai Mohammed

With Nigeria’s economy out of recession, the Federal Government is now targeting 2.5 per cent economic growth by the last quarter of 2018.

The Minister of Information and Culture, Alhaji Lai Mohammed made this known, adding that the recent exit is an indication of better days ahead.

Read Also: Nigeria Exits Recession

On the rising cost of food, the mister has assured Nigerians that the government is working to resolve the challenge.

Data on Nigeria’s Gross Domestic Product released on Tuesday, showed that the country had crept out of recession with a return to positive GDP growth.

The data released by the National Bureau of Statistics showed that the GDP grew at 0.55 percent in the second quarter of 2017. The growth was attributed to the performance of four main economic activities – oil, agriculture, manufacturing, and trade.

Exit From Recession: There Is Nothing To Celebrate, Says PDP

PDP Set To 'Change The Change' In 2019

The People Democratic Party has launched an attack on the All Progressives Congress-led Federal Government in reaction to news that the country has exited recession.

Specifically, the PDP criticised Federal Government officials of for celebrating the news when there are several reasons why it should be concerned.

In a statement by its National Publicity Secretary, Dayo Adeyeye, on Wednesday the PDP said, “We are of the firm belief that there is nothing to celebrate until the so called economic growth improves the harsh living conditions imposed on millions of Nigerians by the Buhari Administration’s incoherent economic policies and is reflected in a reduction of the high cost of goods, services and staple foods necessary for everyday living.”

Data released by the National Bureau of Statistics on Tuesday showed that Nigeria had exited recession after returning to growth in the second quarter of 2017 by posting a 0.55 percent GDP growth.

But the PDP believes that the economic recovery in South Africa, which has also exited recession, offered evidence of the kind of growth that is worth celebrating.

“Conversely, it is important to note that the South African Economy grew by a more impressive 2.5 percent after contracting by 0.3 percent and 0.6 percent in Q4 2016 and Q1 2017, respectively,” the statement read in part.

For the opposition party, Nigerians will continue to suffer until the inflation rate is brought down and the economy is further strengthened.

“When these figures are considered along with inflation rate of 16.05% and an annual population growth rate of approximately 2.67% per annum, it is impossible to escape the conclusion that the recovery of the Nigerian Economy is weak, feeble and insufficient to herald the sort of celebration and back-slapping being displayed by officials of this APC-led administration,” it said.

Since the country slipped into recession, the PDP and APC have traded accusations over which of them is responsible for the country’s economic challenges and ultimately, the recession.

In its statement on Wednesday, the PDP once again pinned the blame on the Muhammadu Buhari administration insisting it handed over a strong economy.

It accused the administration of “incompetence, lack of economic direction and incoherent economic policies”, insisting it led the country into recession “and then prolonged recession in the first place”.

It warned that “a continuation of the Administration’s incoherent economic policies and its penchant for governance by propaganda will only lead us down a more dangerous path”.

President Buhari had on Tuesday welcomed the news of the country’s exit from recession. He, however, said there was a lot of work to be done and that he would not rest until Nigerians feel the impact.

“I’m glad we’re starting to see the fruit of our work but there’s still a lot to be done. We will not rest until all Nigerians feel the impact,” he had said.
“The real change for Nigerians is an impact that is felt in their lives and their pockets. We are on the right path, and our work continues.”

It Is Deceitful To Claim We Exited Recession – Onovo

It Is Deceitful To Claim We Exited Recession – Onovo
File photo: Martin Onovo

Former presidential candidate of the National Conscience Party (NCP), Martin Onovo, believes the Federal Government deceived Nigerians by saying the country has exited economic recession.

Onovo, who appeared on Politics Today, said Nigeria cannot be out of recession and still face increased unemployment rate.

“Obviously, the ruling party is playing with words. Now, when you have a recession that is complicated by rising unemployment and rising inflation, that is stagflation. So it is deceitful in the first instance to claim that we exited the recession,” he told Channels Television on Tuesday.

“When you have a GDP decline in two consecutive quarters, that is a recession. What has happened in Nigeria is that we have had the decline consistent for five quarters, that in the minimum is not a recession but a depression.”

The former presidential candidate, however, said the country had only gone out of a “technical recession”, insisting that Nigeria’s economic crisis was beyond the recession.

He accused the government of being corrupt, noting that it must invite ethical people and encourage merit to tackle the challenges facing the nation’s economy.

“Technically, we just exited a ‘technical recession’ and the actual situation has gone beyond a recession, economic depression is a sustained recession. The government has driven the economy to a bottom.

“What are the things that help you grow your domestic productivity? Power, agriculture, manufacturing, just do the right things and, of course, man is the ultimate resource and your people have to be ethical.

“The deceitful government does not encourage ethical people, a corrupt government does not encourage ethical people, a discriminating government does not encourage merit and that cannot encourage productivity,” Onovo claimed.

On the Economy and Recovery Growth Plan (ERGP) launched by President Muhammadu Buhari in April, he said, “You cannot accept mediocrity and expect excellence.”

“it is very clear the government does not have any clear plan because if you look at the one you want to refer me to, [you are going to say the Economy and Recovery Growth Plan (ERGP)] if you look at that document, that document is worthless.”

Onovo who contested on the platform of the NCP in the 2015 general elections also criticised the government for importing petroleum products into the country.

He said, “What we proposed was that you do not export crude and import petroleum products, grow refining; is that too difficult to understand? We said we will double power in the first term, this government has lost power.”

Nigeria’s Exit From Recession Will Lead To Optimism, Investment – Buhari’s Aide

Nigeria’s exit from its worst recession in more than two decades is positive in several ways, the Special Adviser to President Muhammadu Buhari on Economic Matters has said.

Dr Adeyemi Dipeolu expects news of the exit from recession to encourage optimism and investment in the country.

“The important thing is the optimism that comes with the upward trajectory of the economy and the willingness of people now to invest rather than hide their money for safety under their mattresses,” he said on Tuesday during an appearance on Channels Television’s Politics Today.

Data on Nigeria’s Gross Domestic Product showed that the country had crept out of recession with a return to positive GDP growth.

The data released by the National Bureau of Statistics showed that the GDP grew at 0.55 percent in the second quarter of 2017. The growth was attributed to the performance of four main economic activities – oil, agriculture, manufacturing, and trade.

As the President and several others celebrated the news, many Nigerians were interested to know when the impact will be felt and when the jobs lost during the recession will be recovered and more created.

Dr Dipeolu who considers the exit from recession as “partly a story foretold” because recent economic indicators pointed to it, is not expecting an immediate impact.

Now that the country is out of recession, “the first thing is even just improving the mood and helping people to invest more and therefore people are no longer taking decisions to try and cut back on expenses”, he said.

“And then, as we see time going on, it will reflect in increased employment but that is usually a lagging indicator. It takes some time for those things to begin to hit people’s hands.”

Speaking further on the likely impact of the exit from recession further, Dr Dipeolu said as the economy picks up speed, several parts of the economy including tax revenues would begin to increase and, therefore, some of the capital investments being made by the government would be ramped up to the desired levels.

It is not all optimism, however. The Presidential aide has some concerns.

“The fear, first and foremost, will be any exogenous shocks that take you out of your current growth trajectory by which I mean we have to stay steady to avoid policy slippages,” he said.

“We also have to remain steady in ensuring that all sectors of the economy are contributing their quota to continued growth be it oil, be it agriculture, be it manufacturing and be it solid minerals as well.”