Which US states have greater GDP than other nations?

Unlike many countries where public infrastructure is planned, financed, construct and maintained by national governments, the majority of US infrastructure is the responsibility of states, cities, counties and public agencies. Each can issue their own bonds, which gives investors opportunities to invest in quasi-sovereign debt from jurisdictions whose economic output rivals that of many countries. This map shows how the individual states’ GDP equals the national GDP of various countries. With sovereign debt yields around the world remaining stubbornly low, higher yielding US municipal bonds can present an attractive, higher yielding, quasi-sovereign option for global investors.

Standish, a BNY Mellon company

Unlike many countries where public infrastructure is planned, financed, construct and maintained by national governments, the majority of US infrastructure is the responsibility of states, cities, counties and public agencies. Each can issue their own bonds, which gives investors opportunities to invest in quasi-sovereign debt from jurisdictions whose economic output rivals that of many countries. This map shows how the … read more

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Russian import ban offers food for thought

The effects on countries exporting to Russia following the ban imposed by Moscow on Western imports

Geopolitics has once again taken centre stage. Certain regions are feeling the effects of the Russian imposed ban on Western imports more than others. In Eastern Europe, the Baltic States ship roughly 15% of their exports to Russia. This does not look likely to affect global GDP growth, yet the key risk we face is an escalation in tensions between Russia and the West that results in sanctions against the oil and gas industry.  Baltic nations (as well as Slovakia and Bulgaria) are highly reliant upon Russia for their imported energy needs. Reductions in exports and/or potentially higher energy costs could have led us to downgrade growth forecasts for Poland, Latvia and Lithuania in 2014 and 2015.

Tom Higgins, chief economist, Standish

Geopolitics has once again taken centre stage. Certain regions are feeling the effects of the Russian imposed ban on Western imports more than others. In Eastern Europe, the Baltic States ship roughly 15% of their exports to Russia. This does not look likely to affect global GDP growth, yet the key risk we face is an escalation in tensions between … read more

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Taxing times for Japan

The consumption tax rise and why this time it’s different

In 1997 the Japanese government engaged in fiscal retrenchment and raised the consumption tax from 3% to 5%. Soon after the policy came into force, there was a recession and a sharp increase in Japan’s government debt-to-GDP ratio. Japan was about to enter a 15-year period of deflation – the timing was terrible. If only the underlying economy had been stronger, it might have been different.

But this time around we believe it is different. There is momentum behind the Japanese economy and there is significant political capital invested in the move by Prime Minister Shinzo Abe and his government. We expect it to work and we expect to see the positive effects of the tax rise in the coming quarters.

Miyuki Kashima, BNY Mellon Japan’s head of Japanese equity investments

 

In 1997 the Japanese government engaged in fiscal retrenchment and raised the consumption tax from 3% to 5%. Soon after the policy came into force, there was a recession and a sharp increase in Japan’s government debt-to-GDP ratio. Japan was about to enter a 15-year period of deflation – the timing was terrible. If only the underlying economy had been … read more

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