Venezuela step closer to Mercosur

Brazil's Senate Foreign Relations Committee has approved Venezuela's request to join the South American trade bloc Mercosur.

The committee voted by 12 to five in favour of Venezuela's application, and the proposal will now go before the Senate to gain full approval.

Paraguay's parliament must also approve Venezuela's membership before it will be allowed to join Mercosur.

Venezuela has been trying to join the bloc for three years.

The country officially teamed up with Brazil, Argentina, Paraguay and Uruguay as part of their Mercosur trading bloc in July 2006.

But, so far, its membership has only been approved by the Uruguayan, Argentine and Venezuelan parliaments.

Correspondents say a rejection by Brazil's Foreign Relations Committee would have been severely embarrassing for the Brazilian President, Luiz Inacio Lula da Silva, who is visiting Venezuela this week.

Mercosur was established in March 1991.

Obama signs military budget bill; Pak to get USD 2.3 billion

US President Barack Obama signed a USD 680-billion defence budget bill that provides USD 2.3 billion military assistance to Pakistan with tough condition to make sure that the funds are not squandered or diverted to affect the "balance of power in the region".

Obama said the Defence Authorisation Bill for 2010 eliminates some of the waste and inefficiency in the defence process that will better protect the nation, troops and save taxpayers tens of billions of dollars.


"The bill includes a commitment to the stability of Afghanistan and Pakistan, expanded programmes to keep nuclear weapons out of the hands of rogue states and terrorists, and a reformed system of defence acquisition to save taxpayer money," said House Majority Leader Steny H Hoyer.


The military aid money to Pakistan for the fiscal 2010 as mentioned in the bill has two major components USD 1.6 billion for the Coalition Support Fund and USD 700 million for the Pakistan Counterinsurgency Capability Fund.


For the USD 1.6 billion Coalition Support Fund, the bill would require that, before any more such money is spent, the Obama administration must certify that doing so is in the US national interest and will not adversely affect the region's balance of power.


India feels that the American assistance to Pakistan should be more focused on building counter-insurgency capabilities rather than conventional defence equipment which can be diverted for other purposes.

India's growth rate to accelerate to 6.5 pc in 2010: IMF

International Monetary Fund (IMF) on Thursday said India's economic growth rate will accelerate to 6.5 per cent in 2010 on account of robust domestic demand and rising private investment.

"India's growth is expected to accelerate to 6.5 per cent in 2010 from 5.33 per cent in 2009, on the back of strong domestic demand," the IMF said in its regional economic outlook.

"In particular, the normalisation of financial conditions is expected to support a rebound of private investment, sustaining demand even as the fiscal stimulus wanes," it added.

In its twice-yearly World Economic Outlook released in Istanbul earlier this month, the Fund had pegged the economic growth rate at 6.4 per cent for next year.

The World Economic Outlook had projected India's growth at 5.4 per cent for 2009.

Earlier this week, RBI retained economic growth projection at six per cent with upward bias for 2009-10 in its second quarterly review of monetary policy.

Even Prime Minister Manmohan Singh had recently said that the Indian economy would grow by 6-6.5 per cent in the current fiscal despite being affected by the global financial crisis and drought in the country.

On account of global financial meltdown, India's economic growth slowed down to 6.7 per cent during 2008-09, from over 9 per cent recorded in the previous three years.

In the first quarter of the current fiscal, Indian economy grew by 6.1 per cent.

The IMF said emerging Asia, in particular China and India are rebounding much more quickly that the western world.

It added that the economic recovery in Asia is faster than the rest of the world and is projected to grow by 5.75 per cent during 2010.

"The region (Asia) is out pacing other parts of the world, with the "green shoots" of recovery appearing earlier and taking firmer roots than elsewhere," the IMF said.

IMF forecasts suggest Asia will grow by 5.75 per cent in 2010, higher than the 1.25 per cent predicted for the G-7 economies, but short of the 6.66 per cent average recorded for the region over the past decade.

It added that the pickup in core inflation and inflation expectations in India suggest that demand pressures are already playing a role in pushing up inflation.

Inflation rose fastest in six months to stand at 1.51 per cent for the week ended 17th October, much in line with the RBI's warning that inflationary pressures are building up in the economy.

RBI, in its monetary policy has projected inflation to touch 6.5 per cent mark with upward bias by end of the current fiscal.

Oil above USD 80 a barrel on US growth

Oil prices surged back above USD 80 a barrel in Asian trade on Friday on news the United States has emerged from a long and painful recession after posting its strongest growth in two years.

New York's main contract, light sweet crude for December delivery, was trading at USD 80.08 in morning trade, up 21 cents from the previous day.


Brent North Sea crude for December was up 10 cents to USD 78.14.


After four consecutive contractions, the world's largest economy grew at a seasonally adjusted 3.5 per cent in the September quarter from the previous three months, the Commerce Department said.


The rise was the biggest since the 2007 third quarter, when the subprime mortgage market sparked a global financial crisis that spilled over into the world economy.


"The good news is that the 3.5 per cent annualised rebound in the third quarter GDP (gross domestic product) confirms the most severe and longest recession since the 1930s is over," consultancy Capital Economics said.


"We expect economic growth to continue at about the same pace for the next few quarters as pent-up investment demand is released, inventories are restocked and the boost from the fiscal stimulus continues," it said.


The US is the world's biggest energy consumer and the health of its economy and the consumption patterns of Americans are key influences in the oil market.