China: ‘Peak’ inflation may leave room for stimulating economy
Chinese policy makers may have extra room to loosen lending curbs and boost investment in coming months after slower growth in retail sales and industrial output signaled ebbing inflation pressures. July’s 3.3% gain in consumer prices, announced by the statistics bureau in Beijing, may be the peak for the year, according to Nomura Holdings Inc. and Mizuho Securities Asia Ltd. Industrial production expanded at the weakest pace in 11 months in July, highlighting the moderation in growth triggered by government curbs including a JPY7.5trn (USD1.1trn) lending limit for 2010. (Bloomberg)
Japan: Leader turns salesman in bid to secure foreign contracts
Naoto Kan’s political roots may lie in socialist activism, but that is not stopping Japan’s new prime minister from enthusiastically embracing a new role as salesman for some of his nation’s biggest businesses. As part of a drive to shore up growth in what is still the world’s second-largest economy, Kan and his ruling Democratic party have pledged dramatically to increase the role of government in promoting Japanese companies’ interests overseas, a mission the premier has described as a re-creation of “Japan Inc”. (Financial Daily)
Korea: Bank of Korea to weigh prices, exports in rate debate
Bank of Korea policy makers may tomorrow debate raising interest rates for the second time this year as price pressures jostle with concerns that slower US and Chinese economic growth threatens exports. Seven of the 15 economists surveyed by Bloomberg news predict Governor Kim Choong Soo will raise the seven-day repurchase rate by another quarter point to 2.5% this week, while the rest forecast a delay until at least September. Investors have pared bets that the board will move. (Bloomberg)
UK: July consumer confidence drops to 15-month low
UK consumer confidence dropped in July for a third month, plunging to the lowest since the aftermath of the economy’s worst quarterly contraction in three decades last year, Nationwide Building Society said. The index of sentiment slumped 7 points from the previous month to 56, the customer-owned lender said in an e-mailed statement. The result was the lowest since April 2009. A measure of expectations for the economy fell 13 points to 76. (Bloomberg)
US: Economists cut US growth forecasts, hiring limited
A lack of jobs will shackle consumer spending and restrain the US recovery more than previously estimated, according to economists polled by Bloomberg news. Gross domestic product will expand at an average 2.55% annual rate in the last six months of 2010, according to the median of 67 estimates in a survey taken 31 July to 9 August, down from the 2.8% pace projected last month. Household purchases will climb at a 2.25% rate, compared with a 2.6% gain previously forecast. (Bloomberg)
US: Fed offers fresh aid to shaky US recovery
The US Federal reserve on Tuesday took a small but significant step to counter a weakening US economy recovery, saying it would use cash from maturing mortgage bonds it holds to buy more government debt. The decision to reinvest proceeds from the nearly USD1.3trn (RM4.12trn) in mortgage-linked debt, acquired during the 2008 financial crisis in an effort to keep borrowing costs down, represents a policy shift for the central bank. (Financial Daily)
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