Malaysia: Central Bank sees faster inflation as economy expands
Malaysia’s inflation is set to accelerate and the economy may expand as much as 6% this year, the central bank said, signaling it would move to counter rising prices and “financial imbalances.” GDP may expand 5% to 6% in 2011, BNM said in its annual report. That matches the finance ministry’s forecast in October, and compares with the decade-high 7.2% pace in 2010. Inflation may accelerate to a range of 2.5% to 3.5% this year from 1.7% in 2010, it said. “Growth is likely to improve during the course of the year with better growth performance in the second half of the year,” the central bank said. “Compared to 2010, when monetary policy focused on preventing the risk of financial imbalances and sustaining economic growth, the upside risks to inflation have become increasingly visible in 2011.” (Bloomberg)
Malaysia: Inflation seen at 2.5%-3.5%
The headline inflation outlook for this year is expected to average 2.5% to 3.5%, higher than last year’s 1.7%. The higher inflation is expected to be driven by supply, especially from higher global commodities prices and further adjustments to domestic administered prices. Global commodity prices are expected to increase due to distruptions in supply due to adverse weather conditions, geopolitical developments, speculative activity and strong demand from emerging economies. (Financial Daily)
Singapore: Consumer prices climb 5% on transportation, food cost
Singapore’s inflation held above 4.5% for a third month as the cost of transportation, food and housing climbed, sustaining pressure on the central bank to join regional policy makers in damping inflation. The consumer price index increased 5% last month from a year earlier, a Department of Statistics statement showed. That compares with an inflation rate of 5.5% in January. The median estimate of 18 economists surveyed by Bloomberg News was for a 5.4% gain. Prices fell 0.1% from January, without adjusting for seasonal factors. (Bloomberg)
Japan: Forecasts earthquake damage may swell to USD309bn
Japan’s government estimated the damage from this month’s record earthquake and tsunami at as much as JPY 25trn (USD309bn), an amount almost four times the hit imposed by Hurricane Katrina on the US. The destruction will push down gross domestic product by as much as JPY 2.75trn for the year starting 1 Apr, report showed. The figure, about 0.5% of the JPY 530trn economy, reflects a decline in production from supply disruptions and damage to corporate facilities without taking into account the effects of possible power outages. The figures are the first gauge of the scale of rebuilding Prime Minister Naoto Kan’s government will face after the quake killed more than 9,000 people. (Bloomberg)
China: Can grow 8% for 20 years to top US, World Bank says
China can grow 8% annually for the next two decades to become twice the size of the US economy, World Bank Chief Economist Justin Lin said. The nation can continue to exploit a “latecomer” advantage by borrowing the technologies and industries of advanced countries at low risk and cost, Lin said. The world’s second-biggest economy may be twice as large as the US in two decades’ time, based on so-called purchasing-power parity calculations, Lin said. Using market exchange rates, it may be the same size, he added. China’s growth averaged more than 10% over the past decade as the economy vaulted past Japan, Germany, the UK and France. (Bloomberg)
UK:Banks bring jobs to London as finance pays most tax in UK
Goldman Sachs Group Inc. employs almost as many people in London today as it did in 2007, before Lehman Brothers Holdings Inc. filed for the biggest bankruptcy in history, sparking a global recession. Goldman Sachs isn’t alone. Royal Bank of Scotland Group Plc, recipient of the world’s biggest bank bailout, has more workers in its securities unit than four years ago. Barclays Capital, under Robert Diamond, hired 1,800 in 2010. Investment banks in Europe’s financial capital are adding jobs, helping to bolster headcounts at law and accounting firms across London, as the rest of Britain struggles to recover from the worst economic contraction since the 1930s. Chancellor of the Exchequer George Osborne has little alternative except to do all he can to keep companies such as Barclays Plc and HSBC Holdings Plc from leaving London. (Bloomberg)
U.S: New-home sales unexpectedly fall to lowest on record in February. Sales decreased 16.9% to a 250,000 annual pace, figures from the Commerce Department showed. The median price fell 8.9% YoY from the same month in 2010. (Source: Bloomberg)
E.U: Industry orders in January rise for a fourth month on intermediate goods such as car engines and steel, adding to signs the economy is gathering strength. Orders in the euro area rose 0.1% MoM from December, when they increased 2.7% MoM. Orders jumped 21% YoY. (Source: Bloomberg)
Portugal: Parliament rejects government's deficit plan, threatening to topple Prime Minister Jose Socrates's government and increasing the chance of an international bailout. (Source: Bloomberg)
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