Friday, April 13, 2012

20120413 1028 Local & Global Economy Related News.

Economic Planning Unit director-general Datuk Dr Rahamat Bivi Yusoff said that the government is studying the possibility of having unemployment insurance scheme next year to pave the way for better social safety net for the workers. (BT)

The Malaysian economy is expected to experience a small deceleration to 4.6% this year (5.1% in 2011) before picking up to 5.1% next year, said the World Bank yesterday. Factors in Malaysia's favour this year include a solid labour market with low unemployment and an expected acceleration of private investment from ETP projects. The federal government is likely to meet its budget deficit target of 4.7% of GDP this year (-5% in 2011) and 4% next year, it said. (Malaysian Insider)

PM Datuk Seri Najib Tun Razak and his British counterpart, David Cameron Thursday agreed that both countries have the potential to double bilateral trade to £8bn (about RM39.2bn) by 2016. "It’s an ambitious goal but we will try to work towards that," Najib said. Their discussions covered five vital areas, namely political and diplomatic relations, trade and investment, education and training, science, technology and environment as well as defence and security. In 2010, total trade between Malaysia and Britain stood at over RM13bn. (Bernama)

Indonesia: Extends pause in rate cuts
Indonesia’s central bank left its benchmark interest rate unchanged for a second month as inflation risks persist even after the government was forced to postpone an increase in subsidized fuel prices. Bank Indonesia kept the reference rate at 5.75%. Inflation in March rose for the first time in seven months, and lawmakers have rejected an immediate fuel-cost increase while giving the government power to act if Indonesian crude exceeds the budget assumption of $105 a barrel by 15% over six months. (Bloomberg)

Bank Indonesia expected the economy to grow 6.4% yoy in 2Q12, or slightly lower than the projected 6.5% for 1Q12. (Jakarta Globe)

A recent survey by the Japan Bank for International Cooperation ranked Indonesia as the equal fifth favorite investment destination in 2011, up from sixth in 2010. (Jakarta Globe)

Investors may have expressed concerns about Indonesia’s new mining regulations, but ratings agency Standard & Poor’s says it doubts the government will implement them strictly. (Jakarta Globe)

Philippine exports jumped 14.6% yoy to US$4.43bn in Feb, compared with a 3% gain in Jan. The median forecast was for a 1.7% increase. (Bloomberg)

Thailand’s foreign reserves for the week ending 6 Apr eased to US$178.5bn from US$179.2bn the previous week. (Bloomberg)

The Asian Development Bank raised its voice against the rapid interest rate cuts of Vietnam, saying lowering interest rates too quickly would pose many risks, especially as inflation still stands at some 14%. (The Saigon Times)

Australia: Employers added more workers than forecast
Australian payrolls rose more than economists forecast in March, capping the best quarter since 2010, led by financial and manufacturing states Victoria and New South Wales. Payrolls rose by 44,000, almost seven times the median estimate for a 6,500 increase in a Bloomberg News survey of 24 economists. The jobless rate stayed at 5.2%, compared with expectations for a rise to 5.3%. (Bloomberg)

India: Factory output rises 4.1%
India reported a smaller-than-expected expansion in February industrial production and sprang a surprise by sharply slashing the previously reported January data, reviving worries that an economic upturn may not happen anytime soon. Industrial output rose 4.1% from a year earlier in February, missing the 6.6% median estimate in a poll of 15 economists, as manufacturing growth remained weak. For January, it revised the output growth number to 1.1% from 6.8%, blaming inflated sugar production data in the previous print. (Bloomberg)

China’s foreign reserves for Mar expanded to US$3.31tr from US$3.18tr the previous month. (Bloomberg)

Banks extended Rmb1.01tr in new yuan loans in Mar, compared with Rmb0.71tr in Feb, as China moved to bolster the economy by cutting banks’ required reserves and helping small companies get funding. Money supply growth (M2) quickened to 13.4% yoy in Mar (13% in Feb). (Bloomberg)

China: New yuan bank loans surge, point to easing
China's new yuan loans were the most in a year and money-supply growth quickened after Premier Wen Jiabao moved to bolster the economy by cutting banks' required reserves and helping smaller businesses get financing. Local-currency-denominated loans were CNY1.01tn in March, up from CNY710.7bn in February. M2, the broadest measure of money supply, grew 13.4% from a year earlier. Its foreign exchange reserves, the world's largest, rose to a record USD3.31tn as of 31 March after dropping for the first time in more than a decade in the fourth quarter. (Bloomberg)

China’s Entrepreneur Confidence Index (ECI) rose but the Enterprise Prosperity Index (EPI) declined in the first quarter of 2012. The EPI was 127.3, down 0.5 points from 4Q11. The ECI was 123, up 2.1 points compared to 4Q11. (People’s Daily)

China’s government State-owned enterprises have been ordered to stay out of financial investment and other non-core activities overseas in a move to improve regulation of outbound investment by SOEs. The order, effective May 1, came in a provisional regulation from the State-owned Assets Supervision and Administration Commission, which supervises about 110 central SOEs. (China Daily)

EU: Euro-area industrial output unexpectedly increased in February
European industrial production unexpectedly rose in February, led by France and Netherlands, adding to signs of economic stabilization after a fourth-quarter contraction. Production in the 17-nation euro area increased 0.5% from January, when it remained unchanged. From a year earlier, production decreased 1.8%. (Bloomberg)

UK: Trade gap widened as car exports to US and China dropped
UK trade deficit widened to the most in three months in February as exports of cars and heavy machinery fell, especially to the US, China and Russia. The goods-trade gap widened to GBP8.77bn from a revised GBP7.88bn in January. Exports fell 3.4 percent while imports were unchanged. (Bloomberg)

US: Trade gap narrows sharply in February to USD46bn
US trade deficit narrowed unexpectedly in February as exports hit a record high, imports from China and other key suppliers declined and oil import volume fell to the lowest in 15 years. The monthly trade gap shrank 12.4% to USD46.0bn, the biggest month-to-month decline since May 2009. Exports edged slightly higher to a record USD181.2bn, led by record exports of services and capital goods, such as civilian aircraft and industrial machines while imports dropped 2.7% to USD227.2bn, the biggest monthly drop in three years. (Bloomberg)

US: Unemployment claims rose to two-month high
More Americans than forecast filed applications for jobless benefits last week, reinforcing concern among Federal Reserve policy makers that the labour-market recovery will be slow to develop. Unemployment claims increased 13,000 in the week ended 7 April to 380,000, the highest since 28 Jan. (Bloomberg)

US: Stocks post biggest two-day rally in 2012 on Fed comment
US stocks rose, giving the S&P’s 500 Index its biggest two-day rally in 2012, on policymakers’ signals that interest rates will remain low. Commodity shares gained the most among 10 S&P 500 groups. The Dow Jones Transportation Average, a proxy for the economy, added 2.2%. Hewlett-Packard Co. surged 7.2%, the biggest advance since 2009, after Gartner Inc. said the global personal-computer industry grew in the first quarter as the company remained a market leader. Google Inc. added 1.8% as profit beat estimates. The S&P 500 advanced 1.4% to 1,387.57 rising 2.1% in two days. The Dow Jones Industrial Average climbed 181.19 points to 12,986.58. About 6.3 billion shares changed hands on US exchanges yesterday. (Bloomberg)

The US producer price index was unchanged on a mom basis in Mar (0.4% in Feb), less than consensus of 0.3%, whilst on core basis, the measure stood at 0.3% mom (0.2% in Feb), slightly above consensus of 0.2%. (Bloomberg)

The largest global banks would have needed an extra €485.6bn (US$639.5bn) in their core reserves to meet Basel capital rules had the standards been enforced last Jun. (Bloomberg)

The International Energy Agency said more than two years of steadily tightening oil market conditions appear to have reversed, just as sanctions reduce production in Iran by close to 10%, with global oil inventories boosted by as much as 1.2m barrels a day in 1Q12. (WSJ)

Europe's sovereign debt crisis and other economic shocks are expected to slow the growth in global exports to just 3.7% in 2012 (5% in 2011 and 13.8% in 2010), the World Trade Organisation (WTO) said yesterday in its annual report. The slowdown in 2012 would bring trade growth below the world average rate of 5.4% over the last 20 years, the WTO said. In 2013, the growth rate is expected to rise slightly again, to 5.6%, it forecast. (BT)

The World Bank cut its estimate for China’s expansion this year to 8.2% from a Jan projection of 8.4% as a sluggish world recovery damps export demand and domestic investment and consumption growth decelerate. However, it raised its 2013 growth forecast to 8.6% from a Jan estimate of 8.3%. China’s trade surplus may drop to 3.1% of GDP this year from 3.4% in 2011 while the current account excess will rise to 3% from 2.8%, according to the World Bank’s projections. Inflation in the nation this year will average 3.2% as growth slows, commodity-price “impulses” fade and the property market cools further, the report estimated. (Bloomberg)

Singapore's GDP grew 1.6% yoy in 1Q12 (3.6% in 4Q11), higher than consensus of 1.0%, according to advance estimates released by the Ministry of Trade and Industry. On a qoq basis, the measure grew 9.9% (-2.5% in 4Q11). (Bloomberg)

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