America is not the only country seeing strong signs from its housing market. Peru’s construction industry expanded by 18.4% in January while its overall economy is growing at 6.2%.
Peru continues to be South America’s fastest growing economy. Peru’s government has started to pay down loans early as a tool to combat expected appreciation of their currency, the Nuevo Sol. Benefits have started paying off from an easing political environment that has taken the country back towards capitalism and increased foreign trade. As opposed to Venezuela, whose worsening political landscape has led to a 23% jump in consumer prices and another record level of homicides, about four times the number in Iraq. Unfortunately, for Venezuela, the new president seems to be looking to replicate the ways of the Chavez regime.
Halfway across the globe, Turkey is another strong player to be a leader in the emerging markets. Political reforms have opened up both consumer and corporate lending. Bank lending growth hit 24% in March, accelerating from a mid teens rate near the end of 2012, despite the best efforts of the Turkish government to contain lending by raising reserve requirements at banks. Turkey has essentially avoided the global financial meltdown of 2008, with their GDP expanding over the last 5 years at a 3% annual rate.
Turkey’s largest trading partner, Russia, has seen downside revisions to their GDP growth estimates as political pressures have taken a toll. Recently Russia floated the idea of banning cash transactions over $10,000 US Dollars, to attack their black market, however the middle class will end up feeling most of the economic pain.
India’s currency has shown strength as its infrastructure build-out is poised to require more investment than China over the next several decades. Like Germany, China has seen a considerable portion of their manufacturing stolen by other smaller emerging markets and China’s PMI hit its lowest level since 2009 in February, with a modest bounce in March driven by Government spending.
Europe continues with its tale of two cities, as the economies of the north and south further divide. However it is worth noting that Germany’s unemployment rate rose in March as their retail sales barely increased. Continued political turmoil in the European Union, coupled with strengthening manufacturing in Austria, Belgium, Denmark and even Italy have stolen some of Germany’s manufacturing thunder.
However Italy’s consumer does not have the strength of the northern countries, its consumer spending continues to contract, -7% in February while the northern states show flat to moderate growth. Sadly it appears Cyprus has followed Greece’s lead down the road to depression.