ERMUSR MISC. ISSUES 01-13-2004 - Laserfiche WebLink

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political strife between Taipei and Beijing, which con- nation remains badly divided over his tenure. Barring siders the island to be a breakaway province. a major crisis,the economy will gain about 3% in 2004 following a 15% plunge in 2003. GERMANY, the heavyweight in the 12-nation euro zone and the fifth-largest U.S. trading partner, is INDIA should keep growing at about 5.5% in 2004, coming out of its mild recession in 2003 and will thanks to improvement in the agricultural sector and achieve GDP growth of about 1.7% in 2004. The gov- a booming business services sector. But the country's ernment is reforming some rigid labor laws that have lingering protectionist policies limit trade prospects. hampered efforts by businesses to adapt to changing economic conditions and global markets. AFRICA is sure to benefit from rising prices for com- modities such as gold and diamonds. Growth on the OTHER EURO-ZONE ECONOMIES will see gains ranging continent will hit 4°ro in 2604, up from 3% in 2003. from about 2% for France and Italy to 3% for Spain, which has done the most to liberalize labor laws. A Soft Dollar Overall, the zone can expect growth of about 2% in Pressure from the huge U.S. trade and budget deficits 2004, up from less than 1% in 2003. will cause the dollar to stay weak against other major currencies in 2004 and probably through 2005. De- Other Markets spite an occasional THE UNITED KINGDOM will have an increase of about FURTHER TO FALL rally, the overall 2.7% in GDP, up from 1.7% in 2003. U.S. exports 110 trend will be down. that will benefit include construction and building 105 That won't prompt products, medical technology and water resource countermeasures by equipment. 90 9U the Bush adminis- 85 tration because it fa- EASTERN EUROPE is sure to be a bigger market for U.S. 80 Dollar vs.Major Currencies'•.... vors a weak dollar as (Index,1990=100) exports as the economies of Poland, the Czech Re- 75 i I a way to make U.S. Jan. Jan. Jan. Jan. Jan. Jan. public, Hungary and others grow at just over 3% in 2000 2001 2002 2003 2000 2005 exports more cOm- 2004, giving businesses and consumers more money sources:Federal Reserve,aolingerPoeasu Y . petitive. to spend on foreign goods. Eight of the most ad- vanced countries in the region will join the duty-free Trade Talks European Union(EU) in May. The area is on track to Multilateral efforts to negotiate lower trade barriers become a growing market for U.S. information tech- will make progress in 2004 but aren't likely to bear nology, construction equipment, telecommunications fruit until 2006 at the earliest. The WTO,launched services and auto parts and accessories. in 1995 and comprised of 148 nations, will eventually work out a compromise over reducing the agricultural RUSSIA depends on sales of oil and natural gas to bol- subsidies that rich countries give their farmers to the ster its economy. High natural gas prices are going to detriment of growers in less-developed nations. partially offset lower oil prices,but the economy's Meanwhile, the U.S. is going to move ahead with growth rate will slow to 4.5% in 2004, down from 6% separate trade deals with countries in Central Ameri- in 2003. Russia will continue to import U.S. aeronau- ca, Africa and Asia. tical, telecommunications and oil and gas equipment. U.S. farmers are sure to win a battle with the EU over genetically modified foods. The WTO is expect- SOUTH AMERICA can expect Brazil, the continent's ed to insist by mid-2004 that the EU drop its opposi- biggest economy, to be an economic growth leader. tion to the sale of such foods. Despite that victory, Brazil's GDP will grow 3.5% in 2004 from just 1% in public opposition in Europe will hamper sales. 2003, thanks to ongoing efforts to rein in government A nagging tax tiff between the U.S. and Europe is spending. Argentina is likely to continue a slow recov- headed for settlement in 2004 to avoid sanctions the ery from a depression with 4.5% growth. Venezuela's WTO has authorized against U.S. exports. The top economic prospects remain subject to political tur- tax rate on U.S. manufacturers will be cut from 35% moil under embattled President Hugo Chavez. The to 32% to help make up for lost export subsidies. WHAT'S AHEAD FOR 2004 I 5