20110727 1111 Local & Global Economic Related News.

Malaysia's exports of rubber products are likely to increase  by about 11% yoy or  RM2bn to RM14.4bn this year due to higher prices and output. Deputy Plantation  Industries and Commodities Minister Datuk G. Palanivel said production for the 1H11 rose  to 480k mt from 450k mt during the same period last year. He said, "It is estimated that by  2020, the export revenue derived from the integrated rubber industry will reach more than  RM98bn.  

• Demand for natural rubber was estimated to grow at a modest pace this year at 3.8% to  11.149m mt due to anticipation of slower growth of the global economy. Under the  National Key Economic Area (NKEA), it was projected that the Malaysian rubber industry  would contribute RM52.9bn to Gross National Income by 2020 compared to RM20bn in  2010.” (Bernama)      

A review of the current  National Automotive Policy (NAP) by the Government is  expected to be announced by year-end. A source said the new NAP which is expected to be 100 pages long would streamline the NAOP that was reviewed in 2009 to facilitate the  technological advancements and trends of the global automotive industry. (Star Biz)  

Foreign direct investment (FDI) inflows to Malaysia are expected to reach US$10.0bn in  2011, surpassing last year's record of US$9.1bn (US$1.4bn in 2009), said International  Trade and Industry Minister Datuk Seri Mustapa Mohamed.  

• The recovering global FDI trends, supported by the government's initiatives such as the  Economic Transformation Programme (ETP), would be the key drivers for foreign  investments, he noted.  
• The World Investment Report 2011 forecasts that global FDI will grow 5.0% this year to  reach the pre-crisis level of US$1.4-1.6tr. The trends are expected to continue and reach  the US$1.9tr mark in 2013, equivalent to the peak of global FDI in 2007. (Bernama)     

The Northern Corridor Implementation Authority (NCIA) expects investments this year  in the Northern Corridor Economic Region (NCER) to exceed last year's RM6.1bn, judging  from the investments of RM3.3bn received, thus far, in the first four months of the year.  (BT)

Home prices in 20 U.S. cities dropped in the year ended May by the most in 18 months,  adding to evidence the housing market is struggling. The S&P/Case-Shiller index of  property values in 20 cities fell 4.5% yoy in May (-4.2% in Apr), the group said. The decline  matched the economists’ forecast. (Bloomberg)  

U.S. consumer confidence unexpectedly rose in Jul from an eight-month low, led by a  rebound in the outlook for jobs over the next six months. The Conference Board’s index  climbed to 59.5 in Jul (57.6 in Jun), figures from the research group showed. Economists  predicted the Jul gauge would fall to 56. (Bloomberg)  

U.S. new home sales  unexpectedly fell for a second month and a gauge of property  values also dropped, showing the industry that sparked the recession is stagnating.  Purchases dropped 1% mom in Jun to a 312,000 annual pace (315,000 in May), a threemonth low, figures from the Commerce Department showed. Economists expected new  home sales climbing to a 320,000 annual rate. (Bloomberg)  

US: Obama administration threatens veto of Boehner debt plan
The Obama administration threatened a presidential veto of House Speaker John Boehner‟s two step plan to raise the US debt ceiling and cut USD3tn in government spending amid new questions about its impact. President Barack Obama‟s Office of Management and Budget said it “strongly opposes” the measure, which the House is set to vote on today, and would recommend a veto if it were passed by Congress. (Bloomberg)

Japan's corporate services price index (CSPI) fell 0.7% yoy in Jun (-0.9% in May), the  Bank of Japan said. Economists expected a reading of -0.8% in Jun. (Reuters, Bloomberg)  

Singapore's  manufacturing output increased 10.5% yoy in Jun (-17.5% in May).  Excluding biomedical manufacturing, output increased 0.6%. The star performer of the  month was the biomedical manufacturing cluster, which grew 38.8% yoy in Jun.  Economists expected a reading of 9.0% in Jun. (CNA, Bloomberg)  

The smallest U.S. hay crop in more than a century is withering  under a record Texas  drought, boosting the  cost of livestock feed for dairy farmers and beef producers from  California to Maryland. The price of alfalfa, the most common hay variety, surged 51% in  the past year, reaching a record US$186 a short ton in May, government data show. Hay  and grass make up about half of what cattle eat over their lifetimes, so parched pastures  are forcing ranchers to find alternative sources of feed, pushing some spot-market corn to  the highest ever. (Bloomberg)  

India’s central bank raised its benchmark interest rate more than forecast to quell the  fastest inflation among major economies. The Reserve Bank of India increased the  repurchase rate to 8% from 7.5%, it said in a statement. No economist predicted the  decision. (Bloomberg)  

India: Signals tougher inflation resolve to avert ‘hard landing’
The Reserve Bank of India signaled it is prepared to accept a slower expansion to pull down an inflation rate that risk causing a crash in the pace of growth in Asia‟s third largest economy if left unchecked. The central bank raised benchmark interest rate by a larger-than-expected 50bps yesterday. (Bloomberg)

China’s  pork prices fell last week for the first time in three months, aiding the  government’s efforts to contain the fastest  inflation in three years. The price of the  Chinese staple dropped 0.2% in the week ended 24 Jul from the previous week  as  supplies increased and demand slowed, the Ministry  of Commerce’s said. That was the  first decline since the week ending 8 Apr. (Bloomberg)  

The  U.K. economy barely grew in 2Q, suggesting the Bank of England will continue to  keep rates at a record low to boost a flagging recovery. Gross domestic product rose 0.2%  qoq in 2Q (+0.5% in 1Q), the Office for National Statistics said. The reading matched  economists’ expectations. (Bloomberg)