Allies of Thailand’s fugitive ex-leader Thaksin Shinawatra stormed to victory in elections yesterday, in a remarkable comeback after years of turmoil sparked by his ouster in a military coup. Prime Minister Abhisit Vejjajiva conceded defeat and congratulated a victorious opposition led by Thaksin’s youngest sister, Yingluck Shinawatra, who is now set to become Thailand’s first female premier. With almost all the votes counted, Puea Thai had won 263 seats out of 500, well ahead of the Democrats with 163, according to the Election Commission. (The Sun)
Thailand: Yingluck may spur prices, Baht in ‘double whammy’ for exporters
Efforts by Thailand’s incoming government to boost growth and lift incomes may accelerate inflation, forcing interest rates higher and increasing business costs even as a strengthening currency threatens exports. The Bank of Thailand is assessing the economic effect of policies that may be implemented by the Pheu Thai party after it won the 3 July election, director Mathee Supapongse said. Pheu Thai, which is assembling a five-party coalition that would hold 299 seats in the 500-member parliament, campaigned on pledges to raise the minimum wage and guarantee rice prices for farmers. (Bloomberg)
Spain: Registered unemployment dropped in June for the third month as a recovery in the countrys tourist industry created jobs. The number of people registering for jobless benefits fell by 67,858 or 1.62% from May to 4.12 million, the Labor Ministry in Madrid said in an emailed statement. (Source: Bloomberg)
Vietnam: Central cut its repurchase rate by one percentage point even after inflation accelerated to one of the fastest in the world. The State Bank of Vietnam said it lowered the rate to 14% from 15%, according to an emailed statement. (Source: Bloomberg)
Australia: Retail sales unexpectedly fell and building approvals dropped in May by the most in four months, sending the nations currency lower on expectations the central bank will extend a pause in raising interest rates. Sales dropped 0.6% from a month earlier and permits to build or renovate houses slumped 7.9%, the Bureau of Statistics said in Sydney in separate reports. (Source: Bloomberg)
Indonesia: Indonesia’s inflation slows, easing pressure for rate increase
Indonesia’s inflation slowed for a fifth straight month in June, easing pressure on the central bank to join its Asian counterparts in raising borrowing costs. Consumer prices in Southeast Asia’s biggest economy rose 5.54% last month from a year earlier, after climbing 5.98% in May, the Central Bureau of Statistics said in Jakarta. President Susilo Bambang Yudhoyono’s policy makers have extended fuel subsidies and let the rupiah climb to contain inflation amid rising food and oil prices. Bank Indonesia has refrained from boosting borrowing costs since its first rate increase in more than two years in February, in contrast with neighbors from Malaysia to India where officials have accelerated monetary tightening. (Bloomberg)
South Korea: South Korea inflation breaches BOK target for sixth month
South Korea’s inflation exceeded the central bank’s target for a sixth straight month in June, adding pressure on the bank to boost borrowing costs again even as export growth slows. Consumer prices rose 4.4% from a year earlier, after a 4.1% gain in May, Statistics Korea said in Gwacheon, south of Seoul. Exports expanded 14.5% last month, the slowest pace since October 2009, missing analysts’ forecasts for a 17.6% gain, a separate report showed. The government raised its inflation estimate for this year to 4% and cut the growth forecast to 4.5% after global demand weakened and energy costs climbed. (Bloomberg)
China: Services slowdown boosts speculation government may ease tightening
China’s non-manufacturing industries expanded at the slowest pace in four months in June, sending stocks higher on speculation the government may ease monetary tightening policies aimed at taming inflation. A purchasing managers’ index dropped to 57 from 61.9 in May, the China Federation of Logistics and Purchasing said on its website yesterday. A reading above 50 indicates expansion. The Shanghai Composite Index rose 1.7%, extending a two-week rally, as expectations climbed that the government will refrain from raising interest rates and ease some lending restrictions due to slowing growth in manufacturing and services. Vice Premier Wang Qishan urged banks to increase financing to small companies that are having problems raising funds, according to a statement yesterday from the State Council. (Bloomberg)
E.U: May producer-price inflation slowed more than economists forecast in May as the economic recovery faltered and oil prices retreated. Factory-gate prices in the euro region increased 6.2% from a year earlier after rising 6.7% in April, the European Unions statistics office in Luxembourg said. Prices fell 0.2% from April, when they rose 0.9%.(Source: Bloomberg)
E.U: Investor confidence rose for the first time in four months in July after oil prices retreated and the economy gathered strength. An index measuring sentiment in the 17-nation euro region rose to 5.3 from 3.5 in June, Limburg, Germany-based Sentix said in an emailed statement. A gauge of current business conditions climbed to 19.25 from 18.50, while an indicator of expectations advanced to minus 7.75 from minus 10.50. (Source: Bloomberg)
EU: Spain approves spending rule, will pay town halls’ pending bills
Spain’s Cabinet passed a rule to cap central-government and town-hall expenditure, while offering EUR3.4bn (USD4.9bn) of state loans so that municipalities can pay debts to suppliers. The government will urge Spain’s regions to adopt similar measures to the decree, Deputy Prime Minister Alfredo Perez Rubalcaba said in Madrid. Under the new law, inflation- adjusted spending can only rise in line with the average of economic growth over the past five years and projected growth for the next four. The Cabinet also authorized the state credit institute to pay as much as EUR3.4bn of municipalities’ unpaid bills, giving mayors three years to pay the money back. The government’s future transfers to mayors’ offices will be used as collateral. (Bloomberg)
EU: Germany raises annual borrowing targets more than 10% on costs of bailout
German Chancellor Angela Merkel’s government raised borrowing targets by more than 10% for the three years through 2015 after pledging contributions to a future European bailout fund, its multi-year budget plan shows. Borrowing will amount to EUR24.9bn (USD36.2bn) in 2013, more than the EUR22.3bn the Cabinet endorsed on 16 March, according to the 2013-2015 budget plan drafted by the Finance Ministry. The government aims to borrow EUR18.7bn in 2014 and EUR14.7bn in 2015, up from EUR15.3bn and EUR13.3bn, respectively. (Bloomberg)
US: Payrolls probably rose at pace that failed to reduce jobless rate
Employers in the US probably expanded payrolls at a pace that failed to reduce the unemployment rate in June as companies sought to contain costs amid slower growth, economists said a report may show this week. Payrolls climbed by 100,000 workers after a 54,000 increase in May that was the smallest in eight months, according to the median forecast of economists surveyed by Bloomberg News ahead of Labor Department data due 8 July. The jobless rate held at 9.1%. Another report may show growth in services cooled. A recovery that Federal Reserve Chairman Ben S. Bernanke said is “frustratingly slow” explains why employers such as Lockheed Martin Corp. (LMT) and Gannett Co. are cutting positions or becoming reluctant to add as many workers. Faster payroll growth is needed to spur consumer spending that accounts for 70% of the economy. (Bloomberg)
US: Manufacturing unexpectedly accelerated in June
US manufacturing unexpectedly accelerated in June, supporting the Federal Reserve’s forecast that the economy will strengthen in the second half of 2011. The Institute for Supply Management’s factory index rose to 55.3, the first gain in four months, from 53.5 in May, the Tempe, Arizona-based group said. Economists projected a decrease to 52, according to the median forecast in a Bloomberg News survey. Figures greater than 50 signal expansion. Stocks climbed for a fifth day on signs manufacturing is rebounding from higher commodities costs and shortages of parts caused by the earthquake in Japan. As emerging markets power sales at companies like Parker Hannifin Corp., bigger job gains may be needed to boost confidence among U.S. consumers, whose spending accounts for 70% of the economy. (Bloomberg)
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