Japan's Extra Budget Plan, China's Rise in Electric Vehicle Production, and Revised Oil Price Forecasts: Latest Developments from Global Markets
Remarkable developments are taking place in global markets. Japan is preparing a massive stimulus package to combat economic challenges, while China has recorded a historic increase in electric vehicle production. In the U.S., Republicans have taken control of the House of Representatives, and oil prices along with inflation data have become focal points in international markets. These developments continue to impact the balance of the world economies.
Republicans Take Control of the U.S. House of Representatives The Republican Party in the U.S. has gained control of the House of Representatives with 218 seats. As a result, Republicans have ensured they will hold both chambers of Congress as well as the White House. Previously, they already held control of the Senate. This electoral success for the Republicans will allow them to have a greater say in future legislative processes and policy decisions while impacting the political balance. Party leaders plan to use this advantage to implement their targeted policies nationwide.
Japan Plans an Additional Budget of $87 Billion to Finance the Stimulus Package The Japanese government is preparing an additional budget of approximately $87 billion to address economic issues. This budget is expected to be used to assist low-income households and to mitigate the rising cost of living. According to Sankei newspaper, the government will provide exemptions from housing taxes for low-income households and will offer 20,000 yen support per child. Additionally, the Japanese government is considering reintroducing subsidies for electricity and gas prices for three months starting in January to counter high fuel costs. Prime Minister Shigeru Ishiba is expected to finalize this stimulus package on November 22.
RBA President Bullock: “Restrictive Policy Will Continue Until Inflation is Controlled” Michele Bullock, the Governor of the Reserve Bank of Australia (RBA), announced that the monetary policy will remain restrictive until inflation decreases. Bullock stated that current U.S. policies will not have a direct effect on Australian inflation for now. Her comments indicate that the RBA will maintain a tight interest rate policy until inflation is controlled sustainably. This stance may lead markets to act more cautiously regarding future economic trends.
Chinese and Hong Kong Stocks Decline After Property Tax Incentives Chinese and Hong Kong stocks declined as tax incentives aimed at revitalizing the property sector did not satisfy investors. The Shanghai Composite Index fell by 0.32% to 3,428.37 points. Efforts to support the real estate sector fell short of expectations and reinforced the prevailing uncertainty in the markets. This situation indicates a weakened confidence among investors regarding the recovery of the real estate sector. Market players continue to await more concrete steps from Beijing.
Increase in China's Electric Vehicle Production The China Association of Automobile Manufacturers announced that the annual production of new energy vehicles in the country has exceeded 10 million for the first time. This represents an increase of 4.3% compared to the 9.58 million electric vehicles produced in 2023. Production is expected to reach 12 million units by the end of the year. China stands out as the first country to reach the 10 million mark globally. Experts predict that the production of new energy vehicles may further increase by the end of 2024.
EIA Revises Oil Price Forecasts The U.S. Energy Information Administration (EIA) has revised its oil price forecasts for 2025. Brent crude oil is expected to average $76.06 per barrel, while WTI crude oil is projected to be $71.60 per barrel. Both forecasts reflect a slight decrease compared to previous estimates. According to EIA's forecasts, U.S. daily oil production is expected to reach 13.53 million barrels in 2025, with a production expectation of 13.23 million barrels per day for 2024.
Annual Inflation Drops in Russia In Russia, annual inflation fell to 8.54% in October. According to data from the Federal State Statistics Service (Rosstat), a decrease was recorded from the 8.63% level in September. Month-on-month consumer prices increased by 0.75%. In October, food prices rose by 1.23% on a monthly basis and by 9.03% on an annual basis. During this period when the Russian economy is grappling with inflation, controlling price increases continues to be an important agenda item.