The government is confident that the country’s economy will grow more than 5% this year as targeted, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said. The effectiveness and success of the Government Transformation Programme and Economic Transformation Programme would help to expand the economy, he said. (BT)
The International Monetary Fund (IMF) said Malaysia is well-positioned to face the challenging external environment but said public finances and structural reforms are crucial to raise the country’s growth potential for a more balanced growth. The IMF has projected Malaysia’s economy to slow to 4% in 2012 from a projected 4.7% in 2011. It expects inflation to ease and remain contained. (BT)
China: China to fine-tune policy early as first quarter
Chinese Premier Wen Jiabao said the nation should take preemptive measures and start “fine-tuning” economic policies as early as in the first quarter, according to Xinhua News Agency. Economic conditions in Jan and the first quarter deserve attention, Wen told business executives last week in Beijing as he sought opinions on a government report, the official news agency reported. China’s exports and imports fell for the first time in two years in January and lending grew less than estimated, adding to signs growth is weakening in the world’s second-largest economy. [Bloomberg]
China's banking regulator, the China Banking Regulatory Commission, has drafted rules to stop banks from charging their customers excessive fees. All fees must now be set by banks' head offices and not local branches, and banks must be more transparent when setting prices, giving three months' notice before raising fees. (WSJ)
China exports decreased 0.5% yoy (+13.4% in Dec) and imports fell 15.3% yoy (+11.8% in Dec). The median estimate was for a 1.4% fall in exports and a 3.6% drop in imports. The trade surplus widened to a six-month high of US$27.3bn. (Bloomberg)
Chinese banks extended Rmb738.1bn (US$117bn) of new yuan-denominated loans in Jan. That compares with the median forecast of Rmb1tr and Rmb641bn in Dec. Money (Bloomberg)
Money supply M2 in China expanded 12.4% yoy in Jan (13.6% in Dec). The market was looking for a figure of 13.7% yoy. (Bloomberg)
Thailand’s foreign reserves inched higher to US$178.8bn in the week ended 3 Feb, from US$178.4bn in the previous week. (Bloomberg)
The Thai Commerce Ministry has announced that it will from 20 Feb onwards control the prices of 10 items of ready-to-eat meals at THB15-35, according to Internal Trade Department director-general Vachari Vimooktayon. Food vendors who violate the rule will be subjected to jail term, fine, or will be assessed for back tax by the Revenue Department. (Thai Financial Post)
More than half of Thailand’s small- and medium-enterprises (SMEs) surveyed recently would not raise the daily minimum wage paid to their employees to THB300 to comply with the policy of the government, according to a survey jointly conducted by the Social Innovation Management and Business Analysis Centre at Assumption University and the Personnel Administration Association. A startling 57.3% of the SMEs polled also said they would consider moving their production bases to neighbouring countries. (Bangkok Post)
India: Factory output misses estimate amid economic slowdown
India’s industrial production rose less than estimated in Dec, signaling weakening domestic demand as the global recovery faltered. Output at factories, utilities and mines climbed 1.8% from a year earlier, after a 5.9% advance in Nov, the Central Statistical Office said in a statement in New Delhi. The deterioration in factory output may fan concern India’s growth is slowing after the government forecast the weakest rise in gross domestic product since 2009. The central bank has signaled readiness to cut rates and shield the economy if inflation eases further. [Bloomberg]
Japan: Azumi distances himself from Yen intervention remark
Japanese Finance Minister Jun Azumi distanced himself from his comments to lawmakers that indicated a level that triggered intervention in the yen in Oct. “I instructed an intervention when the yen was 75.63, which could pose a threat to the Japanese economy, and finished when it was 78.20,” Azumi said in the parliament in Tokyo. He didn’t mean that the level prompted intervention, and was referring instead to the yen’s closing price before the 31 Oct sales, he later told reporters. Economists and investors are focused on the possibility of more attempts to weaken Japan’s currency as the government seeks to sustain growth. [Bloomberg]
Japan Economy Minister Motohisa Furukawa was adamant that the Bank of Japan should communicate its inflation goal more clearly, saying “it’s desirable for the BOJ to consider whether there’s a better way for the public to understand its inflation policy.” BOJ policy makers had pledged to keep interest rates near zero unless they judge that “price stability is in sight.” (Bloomberg)
Pakistan: Holds rate as price surge curbs scope to aid growth
Pakistan’s central bank left interest rates unchanged for a second meeting as the fastest inflation in Asia after Vietnam curbs scope to ease policy and bolster growth. The State Bank of Pakistan kept the discount rate at 12%. Pakistan, which joins South Korea and Australia in holding rates this week, faces inflation exceeding 10%, faltering growth following floods in 2010 and 2011 and an insurgency near the Afghan border. The disasters, security risks, elevated price pressures and a budget shortfall have left the economy “highly vulnerable,” the International Monetary Fund has said. [Bloomberg]
Philippine exports declined 20.7% yoy to US$3.3bn (-19.4% in Nov). The median estimate was for a 17.4% drop. (Bloomberg)
UK: January producer prices rise faster-than-expected
UK factory output prices rose in January at the fastest pace in nine months as manufacturers raised prices of alcohol, petroleum products and clothing. The cost of goods at factory gates climbed by 0.5% from Dec, the Office for National Statistics said in London. Companies may find it hard to keep increasing prices as demand weakens. The Bank of England, which yesterday pledged to pump an extra GBP50bn (USD79bn) into the ailing economy, expects consumer-price inflation to fall below their 2% target by the end of the year. [Bloomberg]
Greek unemployment rate soared in Nov to 20.9% (18.2% in Oct; 13.9% in Nov 2010), with the total number of unemployed standing at 1.029m, an increase of 126,062 from Oct (692,577 in Nov 2010), according to the Hellenic Statistical Authority. Young people remain the hardest hit by Greece's deepening recession, with a staggering 48% of those aged between 15 and 24 without a job in Nov (35.6% in Nov 2010). (WSJ)
Greek industrial output fell 11.3% yoy in Dec (-7.8% in Nov), with austerity measures identified as the culprit behind this phenomenon. (WSJ)
EU: Greek parliament passes austerity bill as rioters burn buildings
Greek Prime Minister Lucas Papademos won approval from parliament for austerity measures to secure an international bailout after at least 151 members of the chamber voted for the measure, according to a tally of votes. The roll-call voting in Athens is being televised live on state-run Vouli TV and took place as police battled rioters in Athens protesting the measures including state jobs cuts. Ten buildings were set on fire in central Athens by protesters including a Starbucks Corp. cafe, a bank and a movie theater, a fire department spokesman said, speaking on the condition of anonymity in line with official policy. [Bloomberg]
US: Trade deficit in U.S. climbed in December to six-month high
The trade deficit in the U.S. widened in Dec to a six-month high as a strengthening economy prompted bigger gains in imports than exports. The gap increased 3.7% to USD48.8bn from USD47.1bn in Nov, Commerce Department figures showed in Washington. Purchases of goods and services produced overseas were the strongest in more than three years on record demand for capital equipment like machinery and semiconductors. Imports may keep rising as an improving job market underpins consumer spending, and businesses rebuild inventories and replace outdated equipment. [Bloomberg]
US President Barack Obama will revive proposals for US$1.5tr in tax increases as well as spending to boost jobs as part of a 2013 budget request that projects the deficit shrinking next year to US$901bn, according to administration officials. The tax increases would mostly fall on the wealthy, through a new 30% minimum tax on those earning more than US$1m annually, allowing Bush-era tax cuts to expire for families taking home more than US$250,000 and capping the value of itemised deductions for top earners at 28%. (Bloomberg)
American billionaire George Soros slammed German Chancellor Angela Merkel in an interview published on Sun, warning that her policies could lead to a repeat of the Great Depression. "I admire Chancellor Merkel for her leadership. But unfortunately she is taking Europe in the wrong direction," he said, whilst warning against addressing the crisis with spending cuts, urging the injection of funds instead. (AFP)
The monthly US budget deficit narrowed to US$27.4bn in Jan from US$49.8bn in the same month a year earlier, partly because some US$16bn of military active duty pay, veterans' benefits and Medicare payments were accelerated to 30 Dec since 1 Jan fell on a Sun, the Treasury Department said. During the first four months of fiscal 2012, which began 1 Oct, the cumulative deficit narrowed to US$349.1bn from US$418.8bn in the comparable first four months of fiscal 2011. (Reuters)
The US trade gap expanded to US$48.8bn in Dec (US$47.1bn in Nov; originally US$47.8bn). Market expectations were for a gap of US$47.8bn. Exports rebounded 0.7% after declining 1.0% in Nov, whilst imports advanced 1.3% following the 1.0% gain of the prior month. (Bloomberg)
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