Category: Economy

US economy grew at a 3.2% pace in the third quarter of 2017

The US economy grew at an annual rate of 3.2 percent in the third quarter of 2017, slightly below the previous estimate of 3.3 percent, the US government said on Thursday.

The US Department of Commerce today released the latest of its three calculations on the evolution of the Gross Domestic Product (GDP) between July and September.

Despite the slight downward revision, the growth rate of 3.2% is the highest recorded since the beginning of 2015.

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The number is slightly lower than analysts’ estimates, which had anticipated a 3.3% expansion.

The data was driven by a smaller increase in consumer spending, which accounts for two-thirds of economic activity, and grew 2.2%, compared to 2.3% previously anticipated.

Sustained economic improvement in the US has led the Federal Reserve to raise interest rates three times this year, the last one a week ago, to leave them at between 1.25% and 1.5% %.

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President Donald Trump reached the White House in January this year with a promise to achieve annual growth of more than 3 percent underpinned by an ambitious plan that would represent the country’s biggest tax reform over decades and cut corporate and many Americans.

After overcoming a number of obstacles, the plan was approved by both Houses of Congress on Wednesday and promises, according to Republicans, to accelerate economic growth to about 4% per year.

World Bank Methodology hurt countries in competitiveness ranking

The World Bank has changed the methodology for calculating one of its main reports unfairly over a number of years, which has affected the position of countries like Chile in the rankings on corporate competitiveness, the American daily The Wall Street Journal “.

World Bank chief economist Paul Romer told the Journal that he will correct and recalculate national business competitiveness rankings for the past four years in the Doing Business report.

Romer explained that the revisions will especially affect Chile, whose position in the ranking has varied greatly in recent years due to “political motivations” in the World Bank.

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The chief economist said changes in methodologies “severely penalized” Chile’s position under Michelle Bachelet’s administration. Corrections will “focus” accordingly.

“I want to apologize personally to Chile and any other countries against which we have given the wrong impression,” said Romer, who considered the report’s problems to be “his fault.”

“We did not make things clear enough,” Romer said.

The BM is starting the process of correcting reports and resubmitting the corrected rankings.

Chile fell from the 25th to the 57th position of 2006, a period that alternated in power Michelle Bachelet and Sebastián Pinera in the government. While with Bachelet the position fell repeatedly in the rankings, on the other hand, rose with Piñera.

According to a preliminary analysis of Romer, during the last four years, the fall of Chile in the list occurred because of “new metrics” used to calculate the index and not to changes in the economic environment of the country.

“Based on the things we measured before, economic conditions did not worsen in Chile under Bachelet. I realized later that I did not trust the integrity of the report’s data,” he said.

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The “Doing Business” report ranks countries by using metrics such as the number of days needed to open a business in the countries or the costs to get a construction permit. The World Bank updates the methodology over time.

During Bachelet’s administration, the new components of the calculation made a lot of impact in Chile. The country fell from 33rd place in the index of ease to pay taxes in 2015 to 120th position the following year. The drop occurred because of a new metric to calculate the time companies spend to pay taxes.

Romer took the post at the World Bank in October 2016, and the changes in the reports occurred before he took office. Since then, he has questioned other officials about the clarity and conciseness of the reports, notes the Journal.

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