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Low inflation to linger for years in euro zone

By Sumanta Dey (Reuters) - The euro zone is set for at least two more years of low inflation, held down by a strong currency and anemic economic and jobs growth, and still faces a very real threat of deflation, a Reuters poll showed on Wednesday. While the inflation forecasts are mostly in line with the European Central Bank's predictions, they show the difficulty the bank will have in reversing the trend of falling inflation given that its key interest rates are already at or near zero.

Euro strength here to stay, unless ECB steps in

By Anirban Nag and Eva Taylor LONDON/FRANKFURT (Reuters) - Many of the factors driving the euro exchange rate to levels that have set off alarm bells at the European Central Bank are unlikely to go away on their own, part of the reason the bank has been threatening action. The euro is still off the peaks of 2011, but because inflation is now heading close to zero, the ECB is sensitive to its current rate because anything that makes it stronger pushes deflation nearer.

Latin America's growth prospects fizzle on local concerns

By Silvio Cascione BRASILIA (Reuters) - The next two years look more challenging for Latin American economies than previously thought, with prospects for slower growth and higher inflation defying recent market optimism about emerging markets. Prospects for economic growth in 2014 and 2015 were down across the board from a similar Reuters poll in January for all seven major Latin American countries except Colombia, according to the consensus view of over 50 economists polled.

World economy on steady course at best, China a worry, polls show

By Rahul Karunakar (Reuters) - The world economy can expect steady growth at best over the coming year, but any rapid slowdown in China as it tries to rebalance its economy could upset the still-unsteady progress, Reuters polls showed. Growth in the United States, the world's largest economy, looks set to outpace its peers, with Japan and the euro zone still lagging and emerging markets - particularly Latin America - in for a challenging year. <ECILT/US> <ECILT/JP> <ECILT/LTAM>

China first-quarter GDP at 18-month low, to cut reserve ratio for small banks

By Adam Rose and Xiaoyi Shao BEIJING (Reuters) - China's economy expanded 7.4 percent between January and March, its slowest pace in 18 months, prompting authorities to act for the second time in as many weeks to shore up growth. Hours after the National Bureau of Statistics released the data, Premier Li Keqiang was quoted by state media as saying that China would reduce the amount of cash that some village banks hold at the central bank to help the farm sector.

Japan to set tariff-rate quota for Australian pork

Japan has agreed in its bilateral free trade deal with Australia to apply a tariff-rate quota system for Australian pork, under which set quantities would be imported with low duty rates, sources close to the matter said Thursday. Tokyo and Canberra reached a substantive agreement on a bilateral free trade accord on April 7 but details have yet to be officially announced. Japan currently levies a 4.3 percent tariff on Australian pork when import prices are lower than a standard that are set based on domestic transaction prices.

China's growth slows to 7.4 per cent in Q1, raising risk of job losses

BEIJING, China - China's economic growth slowed further in the latest quarter but appeared strong enough to satisfy Chinese leaders who are trying to put the country on a more sustainable path without politically dangerous job losses. The world's second-largest economy grew 7.4 per cent from a year earlier in the January-March quarter, down from the previous quarter's 7.7 per cent, government data showed Wednesday. It matched a mini-slump in late 2012 for the weakest growth since the 2008-09 global crisis.

UK unemployment falls below 7 per cent as earnings growth outstrips inflation

LONDON - Britain's unemployment rate has fallen below 7 per cent for the first time in five years, with earnings growth narrowly outstripping inflation. The Office for National Statistics said Wednesday that 2.24 million people were unemployed in the three months to February, a rate of 6.9 per cent. That compares with 7.2 per cent in the previous quarter. Average earnings grew by 1.7 per cent in the year to February, exceeding the rate of inflation, which was 1.6 per cent at last count, in March. Stripping out bonuses, however, earnings growth was a more modest 1.4 per cent.

US Treasury warns China over recent yuan fall

The US Treasury said Tuesday that China cannot be ruled a manipulator of its currency despite the yuan's sharp slide since January. But the Treasury warned that the recent fall could "raise particularly serious concerns" if it represents a reversal in Beijing's commitment to a more free-floating yuan.

Euro zone inflation sticks in 'danger zone', keeps ECB under pressure

BRUSSELS (Reuters) - A drop in March euro zone inflation to its lowest level since November 2009 was confirmed on Wednesday, keeping pressure on the European Central Bank to intervene if prices do not rebound. The year-on-year inflation rate in the 18 countries sharing the euro was 0.5 percent in March, down from 0.7 percent in February, the European Union's statistics office Eurostat said. It was the sixth straight month that inflation remained in what ECB President Mario Draghi called a "danger zone" of below 1 percent.
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