The world economy is “teetering on the brink” of a severe downturn and is expected to grow only 1.8 percent in 2008, the United Nations said in its midyear economic projections. That's down from a global growth rate of 3.8 percent in 2007, and the downturn is expected to continue with only a slightly higher growth of 2.1 percent in 2009, the U.N. report said.
The U.N. economists said the deepening credit crisis in major market economies triggered by the U.S.-led slump in housing prices, the declining value of the U.S. dollar, persistent global imbalances, and soaring oil and commodity prices pose considerable risks to economic growth in both developed and developing countries.
The report, prepared by the U.N. Department of Economic and Social Affairs, forecast that U.S. economic growth will decline from 2.2 percent in 2007 to -0.2 percent this year, with only slight recovery in 2009 to 0.2 percent growth.
Associated Press
Cubic to supply system to Polish Air Force
Cubic Corp. of San Diego said it will provide its latest air combat training system to the Polish Air Force under a $9.5 million contract awarded by the U.S. Air Force at Eglin Air Force Base. Cubic said its P5 Combat Training System will be delivered to Poland's Poznan-Krzesiny and Lask air bases by late 2009.
Warning issued for organ transplant drugs
Health regulators again warned that Roche and Novartis drugs prescribed to organ transplant patients can cause miscarriages and birth defects when used by pregnant women. The Food and Drug Administration in October said it received reports of miscarriages and infants born with ear and mouth birth defects after their mothers took Roche's CellCept. At the time, FDA added its most serious warning to CellCept and a similar Novartis AG drug, Myfortic.
FDA spokesman Christopher Kelly said the agency has not received any new reports of pregnancy-related problems, but was concerned some doctors may not have seen the initial warning. CellCept and Myfortic are used to suppress the body's immune system to avoid organ rejection in transplant patients.
Associated Press
Etc.
British Airways posted record annual profits, but a disastrous opening at its flagship Heathrow Airport terminal prompted the carrier's chief executive to refuse a bonus. The airline more than doubled net profit $1.3 billion in the year to March 31. Chief Executive Willie Walsh declined his bonus, attempting to defuse investor and public ire over the Terminal 5 fiasco that resulted in stranded passengers and missing luggage.
Associated Press
Abercrombie & Fitch Co. said first-quarter earnings rose to $62.1 million, or 69 cents per share, in the three months ended May 3 compared with profits of $60.1 million, or 65 cents a share, a year ago. Sales for the retailer rose 8 percent to $800.1 million, but sales at stores open at least a year, considered a key indicator of a retailer's strength, fell 3 percent. The results are “pretty positive,” especially in comparison to other apparel retailers, said Brady Lemos, an analyst with Morningstar. He said Abercrombie's stores have become particularly popular among foreign visitors.
Associated Press
Japan's economy grew at a stronger-than-expected 3.3 percent annual pace in the first quarter, racking up its third consecutive quarter of growth. Japan's gross domestic product – or the value of a nation's goods and services – grew 0.8 percent in the January-March quarter from 2007's fourth quarter. That would be a 3.3 percent annual pace. But analysts warned that growth was almost certain to slow in coming months, citing technical factors, such as a downward revision for the previous quarter and an extra day in February for the leap year.
Associated Press
FAO Schwarz will open toy stores in nearly 700 Macy's department stores over the next two years in a move that both stores hope will drive traffic in a tough economic environment. The two companies said that about 75 full-size FAO Schwarz toy stores will open across the country in the fall, along with about 200 smaller shops that will be up to 300 square feet.
Associated Press
The peso soared to its highest level in almost five years in Mexicon City trading as investors bet the central bank could raise interest rates this year despite a statement from policy-makers widely seen as neutral on the direction of monetary policy. The peso rose 0.59 percent to 10.415 per dollar at the official central bank close, its strongest level since July 2003. This year, the peso has gained nearly 5 percent. Investors also were betting the United States would not raise interest rates this year after a plunge in U.S. consumer confidence raised concerns about an economic contraction in the second quarter.
Reuters
