ECONOMICS

China faces near-term risk of deflation, central bank says
The People's Bank of China warned that the country faces both deflationary risk and pressures that are likely to depress economic growth. The central bank said deflation is a possibility in the near term but did not give a time frame. Forbes/Reuters (23 Feb.)

Authorities work to bolster Central European currencies
The central banks of Hungary, Poland, Czech Republic and Romania issued coordinated statements about what they called unjustified weakness of their currencies, raising the possibility that they will intervene in foreign-exchange markets. The statements helped their currencies rally Monday. Concerns about the stability of the region's banks are mounting as the currencies depreciate. Financial Times (24 Feb.)

Crisis widens gap between Eastern Europe, richer West
The economies of Eastern Europe have taken some serious hits during the downturn, and the divide between them and the richer countries of Western Europe is widening. Experts said the difficulties of poorer countries do not justify panic by investors because many of these nations have survived much worse. International Herald Tribune (24 Feb.)

Despite pessimism, no Great Depression II awaits Canada
Policymakers, economists and people on the street are talking more about the world being in a depression, but there is little evidence that Canada, although definitely feeling the effects of the downturn, will experience anything that severe. The world is a different place today, and the central banks in Canada and the U.S. have tools to fend off deflation that were not available in the 1930s. The Globe and Mail (Toronto) (23 Feb.)

Mexico's retail sales fall to lowest level since 2002
Shoppers in Mexico slashed their purchases of clothing, appliances and pharmaceuticals in December, bringing retail sales down to their lowest level in six years. Mexico's statistics agency said retail sales fell 3.3% compared with the same month a year earlier. Bloomberg (23 Feb.)