Friday, June 29, 2012

20120629 1014 Local & Global Economic Related News.

Malaysia : The liberalisation of the services sector is expected to help speed up economic growth through the process of integration into the global market, the Dewan Rakyat was informed Thursday. Apart from providing a more attractive economic environment for foreign investments, the opening up of the market have also raised domestic capacities and filled in the gaps in the services sector through these investments, said Deputy Minister of International Trade and Industry Datuk Mukhriz Tun Mahathir. Investments in the sector had gone up by 91.8% to RM70.4bn in 2011, compared with RM36.7bn in 2010, where the contribution of foreign investors had also gone up to 25.4% from 11.2% previously. Domestic investments nevertheless continued to stay high at RM52.4bn in 2011 against RM32.6bn in 2010, he added. (Bernama, Financial Daily)

Malaysia is on target to realise the investment goal of RM115bn for this year, said Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed. This is despite the uncertainty in the US, the Eurozone crisis and moderation in economic growth in some countries. Malaysia's performance is reasonable and on track to achieve 4-5% economic growth for this year, he added. According to a survey by the Malaysian Investment Development Authority (Mida), 976 companies which responded, planned to invest RM97.4bn this year. Of this, 42% were from oil and gas, 20% from manufacturing, 13% in infrastructure and utilities, 23% from services and 2% from agriculture. (Bernama, Financial Daily)

Thailand: Finance ministry raises growth forecast as output rises
Thailand’s finance ministry raised its growth forecast for a second time this year after industrial output rose more than what economists expected in May as supply constraints after last year’s floods eased. The industrial production index rose 5.5% y-o-y after a revised 0.1% contraction in April. The median of 11 estimates in a Bloomberg News survey was for a 2.5% gain. The ministry raised its 2012 growth forecast to as much as 6.2% and said easing inflationary pressure will allow the central bank to hold the interest rate through 2012. (Bloomberg)

Thailand: Seeks to limit rubber exports
Thailand, the largest rubber producer, will discuss with Indonesia and Malaysia possible limits on shipments from the countries that represent about 70% of global supply in a move to boost plunging prices. “If necessary, there will be a limit on exports,” deputy farm minister Nattawut Saikuar said without giving more details. “The three countries will have to jointly make the decision and set the amount.” Prime Minister Yingluck Shinawatra will discuss the matter “informally” with leaders from Indonesia and Malaysia, he added. (BT)

India: Singh seeks to restart growth as rupee falls
Indian Prime Minister Manmohan Singh pledged to restore confidence in Asia’s third-largest economy as he resumed control of the finance ministry after growth slowed to the weakest in almost a decade and the rupee slumped. Singh, 79, urged senior ministry officials to act quickly to revive investor sentiment as he assumed the role vacated this week by Pranab Mukherjee, who has earlier resigned to run for president. (Bloomberg)

India is likely to face elevated inflation risks from supply bottlenecks and lingering threats to economic expansion, the Reserve Bank of India said. (Bloomberg)

China defended its limits on exports of rare earths, saying they are “aimed at protecting environmental resources and people's health, not the protection of domestic industries," according to Chinese foreign ministry spokesman Hong Lei. (AFP)

The Hong Kong stock exchange is setting up a joint venture with the Shanghai and Shenzhen exchanges as it seeks to boost economic integration. (AFP)

South Korea’s current-account surplus was US$3.61bn in May, a six-month high, compared to a revised US$1.73bn in Apr and US$2.18bn in May last year. (AFP)

South Korea’s 8.5tr won of economic support measures announced yesterday, including assistance for small businesses and low-income earners, leaves room for a bigger response if conditions deteriorate, said finance ministry director-general Choi Sang Mok. (Bloomberg)

Japan’s retail sales grew 3.6% yoy in May (5.7% in Apr), more than the 2.9% expected by economists as rebuilding in northeastern regions and government automobile incentives boosted consumption. (Bloomberg)

Greek Prime Minister Antonis Samaras will ask EU partners to "respond to sacrifices" by recession-hit Greeks, and seek changes to the conditions of a second EU-IMF bailout. (AFP)

EU: Leaders reportedly planning EUR120bn growth pact
EU officials have agreed to a EUR120bn package to support growth in the most vulnerable countries, media reports said late Thursday. However, Italy and Spain are asking other members, particularly Germany, to take steps to lower their borrowing costs first, according to the reports. (MarketWatch)

EU: Confidence slumps while German unemployment rises
Economic confidence in the euro area slumped to the lowest in more than 2 years in June and German unemployment increased more than economists forecast, adding to signs that the European economy has fallen into a recession. An index of executive and consumer sentiment in the 17-nation euro area dropped to 89.9, the lowest since October 2009, from a revised 90.5 in May. In Germany, the number of people out of work rose a seasonally adjusted 7,000 to 2.88m, coming in higher than the economists’ forecast of 3,000. (Bloomberg)

EU: Moment of truth elusive as leaders gather for euro summit
Europe’s leaders today cap their latest effort to check the financial crisis that claimed Cyprus this week as its fifth victim. Euro-area finance ministers set the stage for today’s gathering in Brussels of the EU’s 27 chiefs, approving Cyprus’s bailout and detailing how they would aid Spanish banks. Consensus breaks down on safeguarding governments in Spain and Italy, with German Chancellor Angela Merkel rejecting calls to do more to cut their borrowing costs. (Bloomberg)

The US economy grew 1.9%qoq in 1Q12 in the third estimate, matching consensus and prior estimates (3.0% in 4Q11). The GDP price index (measuring economy-wide inflation) was revised to 2.0% qoq from the prior estimate of 1.7% (0.9% in 4Q11), exceeding consensus of 1.7%. (Bloomberg)

The US Supreme Court upheld the core of President Barack Obama’s health-care overhaul, giving him an election-year triumph and preserving a law that would expand insurance to millions of people and transform an industry that makes up 18% of the nation’s economy. (Bloomberg)

US corporate profits gained 13.1% yoy in 1Q12 to US$1.645tr (11.7% in 4Q11), revised down from the initial estimate of US$1.669tr. (Bloomberg)

The US exempted China and Singapore from sanctions over purchases of oil from Iran, hours before restrictions would have entered into force against their banks. (AFP)

US: Jobless claims remain near 2012 high
First-time filings for jobless benefits last week fell slightly but remained near the highest level of the year, the US government reported. Initial claims declined by 6,000 to a seasonally adjusted 386,000 in the week ended 23 June 23. However claims from two weeks ago were revised up to 392,000 from an original reading of 387,000, based on more complete data collected at the state level. (MarketWatch)

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