Every cloud has a silver lining—Cash Rate to go up by five basis points “only”

Heidemarie Vogelweide said last month’s new policy statement was drafted to show that the balance of risks has shifted to the upside, with the currency gaining ground against the Universal Standard Dollar (USD) on a steady to strong basis. Despite concerns related to increasing debts found in the country’s underperforming shipbuilding industry, Governor Vogelweide announced that we will see a hike in the Imperial Cash Rate (ICR) by “only five basis points,” with the economy growing at a slightly faster pace in the third quarter. She also promised a new series of policies which are aimed at alleviating pressures on urban house prices. In terms of core inflation, the Bank of Yohannes has released its Core and Common CPI (headline) commentary. They believe that the rate of price changes of goods and services, excluding volatile goods such as grocery food and crude petroleum, will stay at three per cent. This is in line with earlier predictions made last year.

Don’t ride so high already—confidence indicators say it’s not increasing

In a seemingly self-contradictory way, business confidence has not increased, with less employers intending to hire more workers and more part-time employees believing that they will lose jobs. There are many underlying reasons for both—many small and medium-sized businesses are still concerned about the Executive Council’s policies last year, with Marioncare taking the biggest share of blame this quarter, and next month’s Report to Parliament indicators pointing to weaker growth in retail sales and lower business investment in the aging metals and mining sector.

Setting expectations too high—the alternative to increasing tax is breaking earlier promises

Increasing government consumption this year means higher public debt. However, the Executive Council has enjoyed a modest increase in tax revenues so far, which are forecast to stay on the upside next year. The current Executive Council can afford to continue last year’s planned spending which it had promised to the general electorates. However, the Financial Diary is expecting Chancellor Annabelle Thorndon-Stevensonn to have a bumpy ride soon. The costs of the Infrastructure of Nation-State Significance Programme and Superannuation through the Central Provident Fund Scheme are set to increase again next year. Is it true the Executive Council can’t afford their promises?

The changing faces of Yohannes—more millionaire migrants in our suburbs

Population growth is set to continue unabated this year, with net migration of high net wealth and high income individuals from countries of the Orient set to increase. This will provide more fuel to the fire already raging, further increasing house prices in popular inner-city suburbs undergoing extensive gentrification. We expect to see new funding increase for the residential construction sector. This will come at the expense of the productive sectors of the economy, with productivity growth in the tradable sector of the economy forecast to be lower next year.

Outlook for next week—what can we expect to see?

The Financial Diary is expecting export prices to trend slightly lower, with increasing imports amid higher commodity prices largely driven by fuel and other essential industrial supplies. Low-end manufacturing will continue to face considerable pressure, with strong competitors finally making their presence felt from Alpes (Alpes a septentrionali imperium), Joseon (Imperial joseon), Saarkon (Friendship and Amity), and other new trading partners.