Economy Headline Animator

Thursday, January 31, 2013

Thai to look at baht strength

Thailand's finance minister said he wanted to see more stability in the baht, which has risen strongly this year, and would be talking to the central bank about possible measures, but he ruled out capital controls.

Kittirat Na Ranong told reporters Prime Minister Yingluck Shinawatra had instructed him to speak to the Bank of Thailand and its monetary policy committee as well as outside economists to examine the issue.

RAM Ratings: Malaysia economy to grow 5.3% in 2013

RAM Ratings expects Malaysia's economy to expand by 5.3% in 2013 and pick up pace to 5.8% in 2014, underpinned by robust demand and recovery of the external environment.

In its Economic Outlook report issued on Thursday, the ratings agency said domestic private consumption was anticipated to record healthy growth due to favourable labour-market conditions, aided by a slew of government initiatives and handouts.

As for global conditions, RAM Ratings expected a gradual recovery this year "as policymakers in systemically important economies adopt an accommodative stance in an attempt to combat their respective structural deficiencies".

On the domestic front, it expected healthy growth in private consumption, supported by favourable labour market conditions following the government's initiatives and handouts.

RAM Ratings also expected private investment to expand further, supported by the improved business environment and relatively accommodating interest rates.

"While fiscal policy remains supportive of economic activity, the growth of public expenditure should moderate to meet the government's longer-term fiscal-consolidation objectives and as the 'public-private partnership' method of financing has assumed a larger role in funding various development projects," it said.

The ratings agency also expected Malaysia's exports to improve, in line with the revival of certain advanced economies.

It expected domestic monetary and financial conditions to remain relatively stable this year.
On the Overnight Policy Rate, it said Bank Negara Malaysia was "likely to adjust the upwards by 25 to 50 basis points this year", in response to persistent domestic credit growth and as longer-term inflationary pressures begin to develop.

On the ringgit, RAM Ratings said the local currency retained considerable upside potential because of its strong fundamentals.

In its outlook for the domestic bond market, RAM Ratings expected it to strengthen in 2013, with estimated gross issuances by the government at RM90bil to RM95bil. It expected the private debt securities to be around RM95bil to RM100bil.

"The authorities' supportive fiscal stance and improvements in the domestic business environment will continue underscoring market activity," it said.
(The Star Online)

Monday, July 23, 2012

Japan Sees Wider Global Slowdown

China’s economic outlook was cut by Japan, its biggest Asian trading partner, as the Shanghai Composite Index fell to its lowest level in three years on concern about faltering domestic demand and export growth.

Japan’s increased pessimism echoes that of the International Monetary Fund, which lowered 2013 global growth forecasts this month on Europe’s debt crisis and slower expansions in emerging markets from China to India. Chinese stocks fell today to the lowest since March 2009 as weakness in corporate profits threatens to add to the drags on growth from property-market curbs and limited export demand.

The Shanghai Composite Index fell 1 percent as 1:57 p.m. local time. Jiangxi Copper Co. (358) and China Shenhua Energy Co. led a decline among commodity producers. 

Yen Haven

Europe’s woes have bolstered the yen’s appeal as a haven for investors, causing the currency to appreciate more than 5 percent against the dollar since mid-March and rise to a 11-year high against the euro. Japanese Finance Minister Jun Azumi reiterated today that authorities are ready to take “decisive” action on speculative and volatile movements in foreign-exchange markets. The yen traded at 78.10 against the dollar in Tokyo and the common currency touched 94.56 yen.

Falling Confidence

The European Commission may say consumer confidence in the euro area fell in July in an initial estimate of the data, a separate survey showed. In the U.S., the Federal Reserve Bank of Chicago will release its gauge of national economic activity for June.

‘Severe’ Market

A survey by the center of 22 domestic and foreign banks and institutions had a median forecast for third-quarter expansion of 7.8 percent, with Song’s estimate the second lowest. Chinese Premier Wen Jiabao has warned that his nation is yet to secure the economic momentum needed for a recovery and the situation in the job market may become more “severe.”

Song, who studied economics at the University of Chicago from 1991 to 1995, was appointed one of three academic advisers to the central bank in March when the two-year term of his predecessor ended.
“Sharp fluctuations” in financial markets stemming from global uncertainty could hurt Japan’s growth prospects, the Japanese government said.
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