World Economy!

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Output expansion in the world’s 20 largest economy stalled in Q2
Output expansion in the world’s 20 largest economy – G20 – stalled in Q2 2012. GDP growth in the economies of the 20 biggest contributors to global output increased by 3% in the three months ending June compared with 3.2% in Q1 2012, a G20 data compiled by the Organisation of Economic Cooperation and Development (OECD) shows. Although the growth number was modest, figures across constituent-economies varied. For instance, China – world second largest economy grew by 7.6% while Italy and UK shrank by 2.6% and 0.5%, in that order.
Eurozone
Germany’s top court to decide rescue fund’s fate
Concerns about the fate of the Eurozone’s rescue fund – the European Stability Mechanism (ESM) – were doused last week when a German court ruled in favour of a continuation of its existence. However, the court put a restriction on the Bavarian economy’s contribution – insisting that Germany’s parliamentary decision takes precedence over the size of how much would be contributed. The ESM, Eurozone’s permanent rescue fund, had come under attacks – especially from German critics – who argued that the Fund would put Angela Merkel’s country – the bloc’s biggest economy – in an uncomfortable position with potentially infinite funding of insolvent Eurozone economies. Germany is due to contribute 27% to the Fund.
United States
Fed Plans to Buy $40 Billion in Mortgage Securities a Month


The Federal Reserve plans to expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt per month in a third round of quantitative easing (QE3) as it seeks to boost growth and reduce unemployment. By buying mortgage-linked debt, the Fed hopes to push mortgage costs lower and force investors into other assets, lowering their yields as well. The lower borrowing costs should spur greater lending activity and foster faster economic growth. The New York-based central bank in the recent past propped-up the economy by quantitative easing, buying $2.3 trillion of bonds in two rounds. U.S. economic growth cooled in Q2, coming in at a tepid 1.7%.

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