Economy: Malaysia on track to achieve 5% to 6% growth this year
Malaysia is on track to attain 5% to 6% growth this year, fuelled by an upsurge in domestic investments, despite the uncertain global economic climate. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said Malaysia started pro-active initiatives to spur domestic investments since 2010 and this year the government would pay more attention to stimulate domestic investments, especially from the Chinese community, to realise the target. However, the euro debt crisis in Europe and the recession in the United States would be the main worry for the global market and Malaysia, being a trading nation, was no exception. Mustapa, however, stressed that foreign investments would continue to be the hallmark for Malaysia's GDP growth this year. (Bernama)
Economy: 2011 commodity exports to reach RM130bn
Minister of Plantation Industries and Commodities Tan Sri Bernard Dompok said commodity exports for 2011 is expected to reach RM130bn, compared to RM113.2bn in 2010. He said Malaysia managed to achieve RM118.2bn in commodity exports for the period of Jan to Oct 2011. The Minister added that there was a potential for an increase in palm oil production this year due to growing maturity of plantations. He also noted that CPO prices at the range of RM3,200 per tonne was favourable. (Financial Daily)
Indonesia: Holds rate as currency drop revives inflation risk
Indonesia kept interest rates unchanged for a second month, extending a pause in monetary easing after a weaker rupiah and a government plan to contain fuel subsidies threatened to spur inflation. Bank Indonesia kept the reference rate at 6%, Governor Darmin Nasution said yesterday. The rupiah slid more than 6% against the dollar in the past six months after rate cuts in October and November made Indonesia one of the first Asian nations to reduce borrowing costs last year. While inflation has eased, policy makers need to watch the impact of a possible increase in fuel prices as the government may limit subsidies in 2012, central bank Deputy Governor Hartadi Sarwono said this month.(Bloomberg)
China: Inflation cools to 15-month low
China’s inflation cooled to a 15- month low and producer-price gains were the smallest in two years in December, leaving the government more room to support growth as a global slowdown hurts exports. Consumer prices rose 4.1% from a year earlier, the National Bureau of Statistics said yesterday. Yesterday’s data may allow Premier Wen Jiabao to proceed with a shift in policy focus to bolstering expansion as Europe’s debt crisis crimps overseas demand and officials sustain a campaign to cool property prices. Imports and exports increased the least in two years last month, excluding seasonal distortions, and a report next week may show the world’s second-largest economy expanded at the slowest pace in 10 quarters.(Bloomberg)
India: Production rebounds, giving RBI scope to hold rates
India’s industrial production rebounded from the worst month since March 2009, a sign consumer demand is withstanding record interest-rate increases. Output at factories, utilities and mines increased 5.9% in November from a year earlier after a revised 4.7% decline in the previous month, the Central Statistical Office said in a statement yesterday. The data gives scope for the Reserve Bank of India to keep borrowing costs unchanged on 24 Jan for a second straight month to help fight inflation. (Bloomberg)
Europe: Industrial output declines for a third Month
Euro-area industrial production declined for a third straight month in November, adding to signs that the economy failed to expand in the fourth quarter as leaders struggled to quell the region’s fiscal crisis. Production in the 17-nation euro area fell 0.1% from October, when it dropped a revised 0.3%, the European Union’s statistics office said yesterday. In the UK, output fell for a second month in November as the weakening economy curtailed demand for metals, wood and paper products. Europe’s economy is edging toward a recession as governments toughen budget cuts, eroding consumer spending, and global export demand weakens. Economic confidence dropped to the lowest in more than two years in December and manufacturing contracted. (Bloomberg)
EU: ECB holds rates at 1% and waits for policy to work
The ECB left interest rates on hold on Thursday, pausing to assess the impact of back-to-back cuts and a slew of other measures it unleashed late last year that are showing some signs of helping fight the euro zone debt crisis. The ECB, holding its first policy meeting of this year, held its benchmark rate at 1.0%, matching the lowest level ever. The decision was in line with market expectations. Financial markets showed little reaction. The euro and benchmark German bund futures were both unmoved by the decision. (Reuters)
UK: May resist adding stimulus for now
Bank of England Governor Mervyn King may refrain from adding to emergency stimulus again as policy makers await new forecasts and the economy showed some resilience heading into 2012. The Monetary Policy Committee will maintain its 275bn-pound ($421bn) bond-purchase target after a meeting in London, according to all but one of 41 economists in a Bloomberg News survey. (Bloomberg)
Italy: Bond yields down sharply at 1-year auction
Italy paid less than half compared with a month ago to sell 1-year bills at its first auction of 2012 on Thursday, highlighting continued support for its short-term debt from cheap funds the ECB injected last month. The yield on Italian 12-month bills fell to 2.735%, from the near 6% yield Italy paid to sell one-year paper at a mid-Dec auction. The 10-year yield spread between Italian and German bonds fell below 500 bps for the first time this year. Italy sold 8.5bn euros ($10.78bn) of 12-month BOT bills and 3.5bn euros of bills maturing at the end of May. Italy will launch its 2012 bond issuing campaign on Friday when it offers up to 4.75bn euros of debt including its three-year benchmark and two off-the-run issues. (Reuters)
US: Consumer comfort reaches highest level in six months
Consumer confidence in the U.S. last week reached the highest level since July as the improving job market helped allay pessimism. The Bloomberg Consumer Comfort Index was minus 44.7 in the period ended 8 Jan from minus 44.8 the prior week. As recently as October, the index registered its lowest readings since the 2007-2009 recession, making 2011 the second-worst year in 25 years of data. It’s since increased in four of the past five weeks. Less unemployment and growing payrolls may be lifting consumers’ moods, providing the spark for increases in consumer spending, which accounts for about 70% of the economy. Nonetheless, gasoline prices that are once again rising and wage gains that fail to keep pace with inflation may be obstacles to greater improvement in confidence. (Bloomberg)
US: Jobless claims climb more than forecast last week
More Americans than forecast filed applications for unemployment benefits last week, raising the possibility that a greater-than-usual increase in temporary holiday hiring boosted December payrolls. Jobless claims climbed by 24,000 to 399,000 in the week ended 7 Jan. The number of people on unemployment benefit rolls rose, while those receiving extended payments decreased. Hiring by package delivery companies and retailers during the holidays to meet demand for gifts may now be giving way to an increase in dismissals. At the same time, claims figures are subject to greater volatility during this time of year, as the government has trouble adjusting the data for the seasonal swings in employment. (Bloomberg)
US: Retail sales in increase less than forecast
Sales at US retailers rose less than projected in Dec, confirming forecasts for a slowdown in consumer spending at the start of 2012. The 0.1% gain in purchases last month followed a 0.4% increase in Nov, according to figures from the Commerce Department. The median estimate in a Bloomberg News survey called for a 0.3% rise. Another report showed more Americans than projected filed claims for jobless benefits last week. The slowdown in demand means households are looking to rebuild savings after spending jumped early in the fourth quarter, showing further job gains are needed to fuel purchases. (Bloomberg)
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