ECONOMY

In Brief

Economic sentiment in Cyprus falls in January NICOSIA (Reuters) – Economic sentiment fell in eurozone member Cyprus in January with a worsening outlook in construction, a publicly funded survey showed yesterday. January’s economic sentiment indicator fell 1.6 points to 66.1 points, the Economics Research Center of the University of Cyprus said. Fewer businesses which participated in the survey said they were satisfied with their current overall order books. Many also expected a decline in prices in the coming months, the survey prepared with RAI Consultants said. Sentiment in the services sector appeared to be improving for the third straight month, it said. Cyprus fell into a recession in the second quarter of 2009 on a downturn in the construction sector and in tourism. Romania seen keeping rate above 6 percent Romania’s central bank will keep the benchmark interest rate above 6 percent in 2010 as it misses its inflation target for a fourth year, ING Bank Romania forecast. «Inflation will remain elevated in 2010,» Nicolae Alexandru-Chidesciuc, chief economist at ING Romania, wrote in an e-mailed note yesterday. «It is unlikely the key interest rate will fall below 6 percent during 2010 and we may see hikes already in the first quarter of 2011.» Tobacco tax increases and continued lending increases pushed up the inflation rate to 4.7 percent last year, compared with a maximum 4.5 percent target. Alexandru-Chidesciuc predicts end-year inflation of 5 percent in 2010, compared with the goal of a maximum 3.5 percent. Since starting inflation targeting in 2006, the central bank has met its target once. Inflation pressures will prevent the bank from large rate cuts this year even as it seeks to stimulate growth, Alexandru-Chidesciuc said. (Bloomberg) Vocational training Cedefop, the European Center for the Development of Vocational Training, has launched its new portal (www.cedefop.europa.eu). Thessaloniki-based Cedefop, a European Union agency which supports European policymaking in the field of vocational education and training, said the portal’s content has been organized under four broad themes: identifying skill needs, understanding qualifications, analyzing vocational education and training (VET) policy and developing lifelong learning. Japan’s fiscal woes Japan’s sovereign credit rating outlook was lowered by Standard and Poor’s on concern Prime Minister Yukio Hatoyama’s administration lacks a plan to rein in the world’s largest debt load. «The policies of the new Democratic Party of Japan government point to a slower pace of fiscal consolidation than we had previously expected,» S&P said in a statement yesterday. Japan’s rating could be lowered from the current AA, the third highest, if economic data «remain weak» and measures to buttress growth «are not forthcoming,» the company said. Today’s move highlights concern that the shrinking Japanese population and contracting gross domestic product will erode a savings pool that has kept benchmark 10-year note yields more than 2 percentage points less than US Treasuries. Japan, which has $10 trillion of debt, is the latest to be served warning on fiscal deficits, following Greece and Spain in recent weeks. (Bloomberg)