Thursday, March 27, 2014

Weak Import demand remains a problem

Falling currencies increase the cost of servicing foreign debt and trigger inflation as import prices leap. Weaker currencies should also aid exports by making them cheaper, but the question remains: Export to whom?

European and North American imports are subdued, while slowing growth in manufacturing-driven China makes that market tough for competitors and materials suppliers. Troubles in emerging economies, which account for 50 percent of worldwide GDP, may prove contagious.