Economy: Direct investment posts net outflow of RM7.9bn
Bank Negara Malaysia (BNM) said direct investment posted a net outflow of RM7.9bn for 4Q 2011 from RM7.7bn in the previous quarter. Y-o-Y direct investment switched to net outflow of RM7.9bn from net inflow of RM1.9bn in the previous corresponding period. The central bank said the scenario was attributed to higher net outflow in direct investment abroad (DIA) of RM14.4bn (Q4 2010: -RM8.9bn) and lower net inflow in foreign direct investment (FDI) of RM6.5bn (Q4 2010:RM10.7bn). (Bernama)
Economy: Moody's says Malaysia economy to grow 4.2% in 2012
Moody's Analytics associate economist Fred Gibson says Malaysia's economy is expected to expand by 4.2% this year, driven by resilient household consumption and investment. He said the weakening global economy and soft landing in powerhouse economies namely India and China will weigh on Malaysia's export-oriented industries. He added that resilient household consumption and investment will help offset more moderate growth ahead. According to Gibson, the Malaysian economy is estimated to grow a robust 4.5%y-o-y in the 4Q 2011. The solid GDP growth in 4Q 2011 was supported by buoyant industrial production, burgeoning consumer spending and healthy credit growth that boosted domestic demand, despite global turbulence. (Financial Daily)
Malaysia: 4Q GDP growth slows to 5.2%
The domestic economy grew at a slower pace of 5.2% in 4Q11, compared with 5.8% in the preceding quarter. For year 2011, the annual GDP growth rate was 5.1%, a rather drastic drop against the 7.2% in 2010. However, the decelerating growth is expected amidst the external headwinds in the global economy. Bank Negara Malaysia said the GDP growth was underpinned by domestic demand supported by both private and public expenditure. (Financial Daily)
Australia: RBA’s Lowe sees wage restraint, productivity easing inflation
Australia’s central bank is relying on slower wage growth and better productivity to contain inflation pressures as the damping effects of a four-decade high currency begin to wane, Deputy Governor Philip Lowe said. Australia’s currency has risen 4.8% this year and reached a six-month high of USD1.0845 last week after the Reserve Bank of Australia unexpectedly kept its benchmark borrowing cost at 4.25%. (Bloomberg)
China: To keep investing in Eurozone debt
China will continue to invest in eurozone government debt, the country’s central bank governor said yesterday, while calling on Europeans to produce more attractive investments products for China. Central Bank Governor, Zhou Xiaochuan admitted that China and other emerging nations were waiting for the right time to help the bloc, after a European Union state visit was once again met with encouraging words but no concrete public commitments on fresh funding from China. He suggested Europe needed to work harder to entice Beijing to part with its capital (Financial Daily)
Brazil: USD32bn budget cut allows rate fall, Mantega says
Brazil will cut BRL55bn (USD32bn) from this year’s budget to allow interest rates to fall, while increasing investment to boost growth in the world’s second-biggest emerging market. The cut will allow interest rates to fall and enable President Dilma Rousseff to meet the targeted budget surplus before interest payments this year of BRL139.8bn without sacrificing public investment, Finance Minister Guido Mantega said. (Bloomberg)
EU: Demands more Greek budget controls in bid to forge rescue
Europe’s creditor countries struggled to bridge divisions over a rescue of Greece, seeking more control over how future aid is spent as the clock ticked toward a possible default next month. In a replay of the brinkmanship that marked the early stages of the Greek crisis two years ago, euro-area finance ministers extracted concessions from political leaders in Athens intended to pave the way for the endorsement of a EUR130bn aid package next week. Greece’s plea for more aid on top of the EUR110bn awarded in 2010 has stirred recriminations on both sides of Europe’s north-south economic divide. (Bloomberg)
EU: Greek rescue talks hit snag as EU presses for assurances
Greece said that Europe’s wealthier countries are “playing with fire” by toying with the idea of expelling it from the 17-nation euro area as talks over a second aid program ran into new obstacles. Finance Minister Evangelos Venizelos leveled the accusation after a decision slated for tonight on aid totaling EUR130bn was postponed until at least 20 Feb and possibly until after a full-time Greek government emerges from elections later in the year. Two years after pledging to pull Greece back from the brink, European leaders are torn between pouring more aid into the struggling economy or risking an unprecedented national bankruptcy that might force the country out of the euro and prompt renewed market tumult. (Bloomberg)
US: Factories churning out more goods buoy growth
Factories in the US boosted production in January, capping the biggest back-to-back increases in more than two years, showing manufacturing will remain at the forefront of the expansion. Output rose 0.7% after a revised 1.5% gain in December, the best two-month performance since July and August 2009, when the world’s largest economy was emerging from the recession, according to figures issued by the Federal Reserve yesterday in Washington. Other reports showed homebuilders turned less pessimistic in February and manufacturing in the New York region grew. (Bloomberg)
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