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Fact Sheet & Economic Data_US-India-China

Fact Sheet & Economic Data_US-India-China

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Fact Sheet & Economic Data of 3 countries from "The Economist"
Fact Sheet & Economic Data of 3 countries from "The Economist"

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Published by: api-3747461 on Oct 15, 2008
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Factsheet \u2013 United States

Jun 20th 2007
From the Economist Intelligence Unit
Source: Country ViewsWire

Annual data
2006(a) Historical averages
(%)
2002-
06
Population (m)
299.4
Population growth
1.0
GDP (US$ bn; market
exchange rate)
13,247 Real GDP growth
2.9
GDP (US$ bn; PPP)
13,247 Real domestic
demand growth
3.2
GDP per head (US$; market
exchange rate)
44,244 Inflation
2.6
GDP per head (US$; PPP)
44,244 Current-account
balance (% of GDP)
-5.6
Nominal effective exchange
rate (av; 2000=100)
82.0
FDI inflows (% of
GDP)
0.9
(a) Actual.
Background: The US has the highest level of output in the world, with GDP valued at

US$13.2trn in 2006. Serious economic imbalances have emerged in recent years, including an overvalued housing market (currently in the process of correction), a low propensity to save and an unprecedented current-account deficit. Inflationary pressures have risen as a result of an increasingly tight labour market, but should ease as a consequence of the ongoing slowdown.

Political structure: Powers are constitutionally divided between the executive, legislative

and judicial branches, and between the federal and state governments. The president heads the executive branch. The federal legislature, Congress, consists of a House of Representatives, whose members are elected from constituencies based on population, and a Senate, whose members are elected state-wide (two per state). The president is elected every four years and House members every two years. Senators serve a six-year term, with one-third elected at each congressional election.

Policy issues: A range of tax cuts approved in 2001-05 will expire in 2010, and these are

likely to be extended only with substantial modifications. A reform of the alternative minimum tax will become increasingly pressing. Public finances leave little room for additional tax cuts, and demographic ageing will require a major review of entitlement programmes in the long term. A reform of immigration to facilitate access to guestworker status and to legalise the status of unregistered aliens may be approved.

Taxation: In general, corporate tax rates are high compared with rates in other

industrialised countries. Tax jurisdiction in the US is a complex web of powers divided between the federal government, the states, and local counties and municipalities. Sales tax varies from state to state.

Foreign trade: The merchandise trade deficit reached a record US$836bn in 2006, and

the current-account deficit reached a record 6.5% of GDP, raising fears of a disorderly adjustment. There may be some further progress on trade liberalisation, but targeted protectionist measures will also become more common. Such measures will focus on China, given its huge bilateral trade surplus with the US.

Main exports 2006
% of
total
Main imports 2006
% of
total
Capital goods (excl
auto)
45.8
Industrial supplies
36.1
Industrial supplies
30.5
Consumer goods (excl
auto)
26.5
Consumer goods (excl
auto)
14.3
Capital goods (excl
auto)
25.0
Automotive vehicles,
parts&supplies
11.8
Automotive vehicles,
parts&supplies
15.4
Leading markets
2006
% of
total
Leading suppliers
2006
% of
total
Canada
22.2
Canada
16.4
Mexico
12.9
China
15.5
Japan
5.8
Mexico
10.7
China
5.3
Japan
8.0
UK
4.0
Germany
2.9
Source:ht t p: / / www.econ om i st .com / count ri es/ USA/ profi l e.cfm ? fol der=P r ofi l e-F act S heet
Economic data \u2013 United States
Jun 20th 2007
\u2022

There will be few major policy changes over the next two years, as power is shared by a Republican president, George W Bush, and a Democrat-controlled Congress. Nevertheless, there will be some progress in isolated fields as the Democrats seek to avoid the impression of being obstructionist. Approval of immigration reform remains a possibility, and a compromise on some tax and entitlement changes can also not be excluded.

\u2022

At the next federal election, in November 2008, besides polls for all the seats in the House of Representatives and one-third of the seats in the Senate, a presidential election will also be held. At this early stage, the most likely scenario is that the Democrats will hold onto their majorities in both houses Congress and win the presidency, which will most likely be taken by Hillary Clinton.

\u2022

The federal budget deficit will decline further in fiscal years 2006/07 (October- September) and 2007/08. Mr Bush is becoming more serious about curbing spending growth, after earlier excesses, although expenditure on homeland security and non-discretionary items will continue to rise at a significant, albeit slower, pace. The Economist Intelligence Unit expects one cut to the central bank's reference rate in late 2007, with the rate hovering near the"neutral"level of around 5% in subsequent years.

\u2022

GDP growth is forecast to decelerate in 2007 as the housing and manufacturing sectors continue to struggle. This will eventually curb private consumption growth. Businesses are better placed, but they are also likely to restrain their spending in the medium term. Growth will average 2.5% per year in 2007-11. High energy prices fed through into producer and consumer price inflation in 2006. Inflation will fall in 2007, owing to the slowdown in the economy, but will pick up with the recovery in demand in 2008, averaging 2.5% per year in 2007-11.

\u2022

With monetary policy being tightened in both the euro zone and Japan, interest rate differentials between the US, Europe and Japan will shrink, resulting in further downward pressure on the dollar against both the euro and the yen. The dollar should regain some strength against the euro in 2008-11 but not against the yen. The current-account deficit will improve as a share of GDP, bringing the deficit as a share of GDP down to 5.5% in 2011. The external payments situation will remain poor relative to most other OECD economies.

Key indicators
2006
2007 2008
2009 2010 2011
Real GDP growth (%)
3.3
1.9
2.5
2.7
2.7
2.7
Consumer price inflation (av;
%)
3.2
2.3
2.5
2.6
2.5
2.5
Federal government budget
balance (% of GDP)
-1.9
-1.4
-1.1
-0.9
-0.8
-0.8
Current-account balance (% of
GDP)
-6.5
-6.1
-6.0
-5.8
-5.7
-5.5
US$ 3-month commercial
paper rate (av; %)
5.0
5.1
5.0
5.3
5.3
5.3
Exchange rate\u00a5:US$ (av)
116.3
116.3 103.5
95.8
93.5
91.8
Exchange rate US$:\u20ac(av)
1.26
1.34
1.35
1.30
1.27
1.26
Source:
http://www.economist.com/countries/USA/profile.cfm?folder=Profile%2DEconomic%20Data

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