Malaysia’s industrial production growth accelerated in December as manufacturing and electricity output increased and exports climbed. Production at factories, utilities and mines gained 3% y-o-y after rising a revised 2.4% in November, the statistics department said yesterday. Exports rose 6.1% y-o-y from a year earlier, according to the trade ministry. Bank Negara Malaysia kept interest rates unchanged last month, saying the economy showed signs of “continued expansion” and will keep growing, aided by public spending. (Bloomberg)
The international reserves of Bank Negara Malaysia (BNM) amounted to RM424.8bn (US$134.1bn) as at 31 Jan 2012, up from RM423.5bn (US$133.7bn) as at 13 Jan 2012. The reserves position is sufficient to finance 9.6 months of retained imports and is 4.1 times the short-term external debt. (BNM)
Exports increased by 6.1% yoy in Dec 2011 (8% in Nov) while imports rose 10.4% yoy (8.4% in Nov), resulting in a trade surplus of RM8.3bn (RM9.5bn in Nov). Economists had projected the exports would increase by 5.3%. For the full year of 2011, exports and imports rose by 8.7% and 8.6% respectively (15.6% and 21.7% respectively in 2010). (Department of Statistics, Bloomberg)
The manufacturing sales increased modestly by 1.1% yoy to RM48.8bn in Dec 2011 (+6% to RM47.4bn in Nov). On a mom basis, it soared 3% (-7.8% in Nov). For the full year of 2011, it grew by 10% to RM588.9bn (+14.1% to RM535.5bn in 2010). Total employees engaged in the manufacturing sector increased 0.3% yoy to 1m persons (+1.2% to 1.004m persons in Nov). Salaries and wages paid in Dec 2011 increased 15.5% yoy to RM2,6bn (+5.9% to RM2.3bn in Nov). Average salaries and wages paid per employee rose 15.2% yoy to RM2,615 (+4.7% to RM2,335 in Nov). Productivity was up by 0.8% yoy (+4.7% in Nov). (Department of Statistics)
Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said export growth is expected to slow further to 5-6% this year (8.7% in 2011) for merchandise exports and 4.9% for services export due to economic problems in Europe. In comparison, world trade volumes are expected to fall to 3.8% this year from 6.9% in 2011. He noted however that with 71.3% of exports heading to Asia compared with 10.4% to Europe, the country was “cushioned” from the adverse conditions in the Eurozone. (Malaysian Insider, Financial Daily)
Indonesia: Unexpectedly cuts interest rate to support growth
Indonesia’s central bank unexpectedly cut its benchmark interest rate for the first time in three months, taking advantage of easing inflation to support growth in a deteriorating global economy. Governor Darmin Nasution and his board lowered the reference rate by a quarter of a percentage point to 5.75% from 6%, Bank Indonesia said in a statement in Jakarta yesterday. Indonesia joins the Philippines and Thailand in cutting borrowing costs in the past month, while the Bank of Korea held off raising rates yesterday as policy makers move to counter weakening global demand. (Bloomberg)
China: January exports probably fell, minister says before data
Chinese Commerce Minister Chen Deming said exports probably fell in January after foreign trade slowed in the second half of last year, as he pledged to maintain “stability” in the yuan’s exchange rate. Overseas sales last month “cannot make us optimistic” and are “expected to have negative year-on-year growth due to Chinese New Year and other factors,” Chen said yesterday. “Chinese trading companies, particularly small and micro businesses, have come under growing pressure.” Hong Kong’s Hang Seng Index fell as much as 0.4% following the comments. (Bloomberg)
China’s producer price index rose 0,7% yoy in Jan (1.7% in Dec). Economists had forecast a 0.8% rise. (Bloomberg)
China: Holiday inflation pick-up may limit easing room
China’s inflation unexpectedly accelerated in January on the boost to spending from a weeklong holiday, limiting room for monetary easing as Europe’s debt crisis damps exports and the property market cools. Consumer prices rose 4.5% from a year earlier, the National Bureau of Statistics said yesterday. Inflation quickening for the first time in six months adds pressure on officials to refrain from any immediate additional cut in banks’ reserve requirements. (Bloomberg)
China's annual inflation rate hit 4.5% in Jan (4.1% in Dec), the highest level in three months, official data showed, as the Chinese Lunar New Year holiday boosted consumer prices. Analysts had expected inflation to rise 4.1%. Before Jan, inflation had eased for five straight months after hitting a more than three-year high of 6.5% in Jul. (AFP)
The Bank of Korea held the benchmark seven-day repo rate at 3.25% in Feb, the eighth consecutive month. The decision is in accordance with general expectations. (AFP)
India: Trade deficit widens as import growth outpaces exports
India’s trade deficit widened to a three-month high in January as import growth outpaced the climb in exports, the top bureaucrat in the commerce ministry said. Merchandise exports rose 10.1% to USD25.4bn last month from a year earlier, Commerce Secretary Rahul Khullar told reporters yesterday. Imports gained 20.3% to USD40.1bn, leaving a trade deficit of USD14.7bn, he said.
Thailand’s consumer confidence index improved to 64 in Jan (63.1 in Dec). (Bloomberg)
Japan’s core machinery orders, which help gauge capital spending, fell 7.1% mom in Dec, deeper than a median market forecast for a 5.0% decline. (Reuters)
Japan's consumer confidence rose to 40.0 in Jan (38.9 in Dec), according to the Cabinet Office. (Bloomberg)
EU: Decision on Greek bailout deferred to pressure Athens
European finance chiefs are set to defer ratifying a EUR130bn (USD173bn) rescue for Greece, pressing the government in Athens to put a newly struck austerity plan into action. “It’s up to the Greek government by concrete actions - through legislation, other actions - to convince its European partners that the second program can be made to work,” European Union Economic and Monetary Affairs Commissioner Olli Rehn said yesterday as he arrived for an emergency meeting of euro-area finance ministers in Brussels. Bloomberg)
Greek leaders failed on Thursday to agree on reforms and austerity measures, the price of a bailout to avoid a messy default, forcing Finance Minister Evangelos Venizelos to go to the country's financial backers with an incomplete deal. Euro zone officials say the full package must be agreed with Greece and approved by the EU, ECB and IMF before 15 Feb so legal paperwork can be completed in time to avoid a chaotic default that could threaten global economic recovery. (Reuters)
Greece has two weeks to identify fiscal savings worth €300m (US$398m) under a new bailout deal with the EU and IMF, a senior Greek government official said. (Reuters)
European Central Bank President Mario Draghi openly encouraged European banks to take advantage of the ECB's next offer of cheap three-year loans later this month, saying use of the facility should not be interpreted as a sign of weakness. "The facilities are there to be used. There is no stigma whatsoever on these facilities," Draghi said, while estimating that demand at the Feb offer of three-year loans "should be substantial." (WSJ)
US: Consumer comfort index climbs to highest level in a year
Consumer confidence in the US climbed last week to a one-year high, spurred by improving employment opportunities and a rally in the stock market. The Bloomberg Consumer Comfort Index rose to minus 41.7 in the period to 5 Feb from minus 44.8 the previous week. Confidence among political independents, considered a key group in presidential elections, increased to a four-year high. Americans’ views of the economy were the least pessimistic in eight months after employers beefed up payrolls in January and joblessness fell to the lowest level since February 2009.(Bloomberg)
The recent spate of good US economic news has led White House officials to lower their projections for the unemployment rate this year, with a top adviser saying the 8.9% estimate that will appear in the White House's budget proposal on 13 Feb is already "stale and out of date." (WSJ)
US applications for unemployment benefits fell 15,000 in the week ended 4 Feb to 358,000 (373,000 in the prior week), Labor Department figures showed. Economists had expected 370,000 claims. A four-week average of new filings hit its lowest level since Apr 2008 of 366,250 (377,300 in the prior week). (Bloomberg)
Inventories at US wholesalers grew 1.0% in Dec (a revised no change in Nov), according to the Commerce Department. Economists expected a 0.4% gain. (Reuters)
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