References in periodicals archive ?
Private consumption, the mainstay of aggregate demand, and investment activity remain sluggish.
'There is not much that a trade and investment diversion can do when aggregate demand is reduced and this would have severe economic consequences in both the short and long run,' he said at the Malaysian Economic Convention 2019 dinner here today.
Macroeconomic adjustments of monetary policy tightening, exchange rate adjustments, reduction in PSDP spending and regulatory measures had started moderating the aggregate demand in country, he added.
'Recall that the last economic recession was caused by weak aggregate demand when many state governments could not pay salaries due to reduced FAAC allocations from dwindling oil prices.
Also, the growth in aggregate demand has contributed to the improvement of balance sheets of Albanian enterprises and has enabled a clearly downward trend in non-performing loans (NPL).
For example, if an oil price increase is driven by an unexpected increase in global economic activity, aggregate investment will likely increase due to booming aggregate demand. However, if an oil price increase is driven by an unexpected decline in the global oil supply, aggregate investment will likely decline due to the higher cost of production.
It was therefore an instrument of government policy to elevate aggregate demand in the economy.
Recovery of aggregate demand due to growing remittances (in January-June 2018 net inflow of remittances grew by 10.2%) and increase of real salaries (growth of real salaries in January-June 2018 made 4.2%) contributed to economic development.
It means that aggregate demand has proved to be higher than previously thought.
Without a depreciation, levels of aggregate demand (especially for imported consumer goods) will remain unsustainably high, and the interbank market will need to be resupplied with dollar liquidity at regular intervals, through whatever means.
BMI Research said further tightening is needed to safeguard the country's macroeconomic stability as inflation remains on a firm uptrend due to higher excise taxes, rising global oil prices, and sustained high credit growth which continues to push aggregate demand up.
The bank said this market-driven adjustment in the exchange rate along with other recent policy measures are expected to contain the imbalances in the external account, thereby containing aggregate demand and also facilitating the prospects for generating non-debt creating inflows.

Full browser ?