Philippine: Growth slows in 1Q11, may recover on government spending. Gross domestic product increased 4.9% YoY based on 2000 prices, compared with a 6.1% YoY gain in the three months through December. (Source: Bloomberg)
Thailand: May raise rate for fourth time this year ahead of vote
Thailand’s central bank will probably increase interest rates for the fourth time this year, as rising food and fuel prices become a pivotal issue for the 3 July general election. The Bank of Thailand will boost its benchmark oneday bond repurchase rate by a quarter of a percentage point to 3%, according to all 16 economists surveyed by Bloomberg, adding to increases of the same amount each in January, March and April. Prime Minister Abhisit Vejjajiva has pledged higher wages and capped food and diesel costs ahead of the poll, as the opposition faults his Democrat party for jumps in the cost of living. The central bank has said inflation risks exceed threats to growth, and predicts the economy will weather disruption from Japan’s earthquake to grow 4.1% this year. (Bloomberg)
New Zealand: Trade surplus widens to record on dairy exports
New Zealand’s trade surplus widened in April to more than twice economists’ forecasts as surging commodity prices and Asian demand boosted dairy exports, strengthening the local currency to a record. Exports exceeded imports by NZD1.11bn (USD910m), the biggest ever, from a revised NZD578m surplus in March, Statistics New Zealand said. Sales to China were up 40%from a year earlier. (Bloomberg)
Greece: EU to decide on aid package by end of June, Juncker says. European Union leaders will decide on a new aid package for Greece by the end of June and have ruled out a "total restructuring" of the country's debt, said Luxembourg's Jean-Claude Juncker, who leads the group of euro-area finance ministers. Inspectors from the EU, the International Monetary Fund and the European Central Bank are set to wrap a review of Greece's progress in meeting the terms of last year's EUR 110b (USD 157b) bailout in the coming days. The EU will then formulate its plan for additional aid to Greece, which remains shut out of financial markets a year after the rescue package. (Source: Bloomberg)
Russia: Central Bank signals rate pause after surprise increase. Bank Rossii, the central bank, raised its overnight deposit rate to 3.5% from 3.25%. It left its refinancing rate and overnight repurchase rates unchanged after a quarter-point increase in April, saying in a statement that borrowing costs may be at the level necessary to tackle inflation and promote growth "for the nearest months". (Source: Bloomberg)
EU: Drop in Spanish inflation rate in May raises hopes for economy
Spain’s May inflation rate was slightly lower than a month earlier, fueling hopes that prices will stabilize and support consumer spending. Consumer prices, based on European Union calculations, rose 3.4% from a year earlier, the National Statistics Institute said. Prices in April gained 3.5%, the most since Oct 2008. Inflation was 3.5% according to the Spanish measure of prices, the institute said. The European Central Bank is “carefully” monitoring inflation risks to avoid commodity prices affecting wage demands and other costs, President Jean- Claude Trichet said on 26 May. (Bloomberg)
Canada: 1Q economy growth quickens to 3.9% on business gains
Canada’s first-quarter economic growth accelerated to the fastest pace in a year, as outlays by businesses increased while consumer and government spending stalled. GDP in the world’s 11th-largest economy expanded at a 3.9% annualized pace from January through March after a previous 3.1% expansion, Statistics Canada said. The Canadian dollar and bond yields fell as the report reinforced investor bets that Bank of Canada Governor Mark Carney will keep his policy interest rate unchanged at 1%. The central bank predicts growth will slow to a 2% pace in the April-June quarter, and exports are threatened by a strong dollar and auto production curbed by Japan’s earthquake and tsunami. (Bloomberg)
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