Friday, March 30, 2012

20120330 1158 Global Economy Related News.

China’s State Council announced a 12-point plan that will offer financing to small firms and more channels for private investment on an experimental basis in the city of Wenzhou, part of broader financial reforms, in what may be a prelude to a national effort to liberalize China's creaking financial system. (AFP, WSJ)

Oil companies may adjust retail fuel prices in China with government guidance under the new fuel-pricing scheme that will focus on reducing the frequency of adjustments and improve pricing transparency. (Shanghai Daily)

China has bumped up the annual long-term foreign debt quota allocated to foreign banks to US$24bn. The new quotas may have more than doubled from previous quotas. (Reuters)

Protests against Indonesia's plans to increase government-controlled fuel prices by 33% spread Thursday, with thousands joining sometimes violent rallies across the archipelago, though Jakarta has yet to see anything close to the tens of thousands of angry citizens blocking traffic and commerce that some politicians had worried about. (WSJ)

Vietnam: GDP climbed the least since 2009 in first quarter
Vietnam’s economy expanded at the slowest pace since 2009 in the 1Q as bank lending declined and domestic demand weakened, adding to the case for further cuts in interest rates. GDP rose 4% in the three months through March from a year earlier, the General Statistics Office said yesterday compared with a previously reported 6.1% in the prior quarter and 5.89% for all of 2011. The report may pressure the State Bank of Vietnam to spur spending at home as Asia’s fastest inflation cools and Europe’s debt crisis limits trade gains. The central bank cut its repurchase and refinancing rates this month and ordered the nation’s top four banks to lower borrowing costs from as high as 25%, seeking to counter a fall of about 2% in loans so far this year. (Bloomberg)

Vietnam’s General Statistics Office and Central Institute for Economic Management are developing a "green" GDP index which is expected to be used in 2014. (Vietnam News)

Vietnamese exports by foreign firms topped US$15.54bn in 1Q12, a 43% yoy increase, according to the Ministry of Industry and Trade. (Vietnam News)

Vietnam's index of industrial production rose an estimated 6.5% yoy in Mar, slowing from a surge of 22.1% in Feb. (Reuters)

South Korea: Output growth slows, economy expands less than estimated
South Korea’s industrial production rose at a slower pace in February and its economy expanded less than the central bank initially estimated in the fourth quarter. Output rose 0.8% in February compared with a revised 3.2% gain in January, Statistics Korea said today.GDP grew 0.3%t in the three months through December from the third quarter, compared with a January estimate of 0.4%, the Bank of Korea said. (Bloomberg)

Japan: Retail sales beat forecasts as confidence returns
Japan’s retail sales rose more than economists forecast in February, indicating that consumer confidence is returning as reconstruction demand boosts the world’s third-biggest economy. Sales increased 3.5% from a year earlier, the biggest advance since Aug 2010, the Trade Ministry said yesterday From a month earlier, sales gained 2 %. The Nikkei 225 Stock Average climbing to pre-earthquake levels and a government subsidy for buyers of fuel-efficient cars are aiding domestic demand, while declines in the yen have helped exporters. (Bloomberg)

Japan’s government will draft a stopgap budget totalling ¥3.6tr for the first time in 14 years to pay for spending and to cover the minimum cost of running the government for the first six days of Apr. (Bloomberg)

Top officials from Japan's government and ruling party formally endorsed a revised bill to double the country's sales tax in a sign of their determination to rein in the nation's soaring public debt. (WSJ)


The export-import banks of the BRICS group of five emerging economies signed two pacts that seek to extend credit facilities to each other in local currencies and reduce demand for fully-convertible units. BRICS also urged the World Bank and IMF to review their quota systems to safeguard the interests of all nations, whilst asserting that aggressive monetary easing by Western central banks is hurting emerging nations. BRICS leaders also discussed creating a new development bank to fund development projects and infrastructure in developing nations. (WSJ)

Japan’s government will draft a stopgap budget totalling ¥3.6tr for the first time in 14 years to pay for spending and to cover the minimum cost of running the government for the first six days of Apr. (Bloomberg)

Top officials from Japan's government and ruling party formally endorsed a revised bill to double the country's sales tax in a sign of their determination to rein in the nation's soaring public debt. (WSJ)

The European Commission’s index of executive and consumer sentiment in the euro area fell to 94.4 in Mar from a revised 94.5 in Feb, in line with economists‟ forecast of 94.5. (Bloomberg)

European governments are preparing for a one-year increase in the ceiling on rescue aid to €940bn to keep the debt crisis at bay, according to a draft statement written for finance ministers. (Bloomberg)

UK: House prices drop most in two years as loans fall
UK house prices fell the most in two years and mortgage approvals dropped to an eight-month low as economic uncertainty hurt demand for property and banks tightened lending conditions. Home values dropped 1% in March, the biggest decline since February 2010, Nationwide Building Society said yesterday. The housing market may face further pressure as job cuts undermine consumer confidence, and a central bank survey published today showed banks expect mortgage availability to decline “slightly” in the second quarter. (Bloomberg)

US Federal Reserve Chairman Ben Bernanke expects the US economy to return to a long-term growth rate around 3% over time, whilst reiterating that containing inflation will be critical when the time comes for the reversal of the ultra-loose monetary policy. (Reuters)

The White House said no decision had been made on tapping the US strategic oil reserve, dampening speculation that major consumer nations could use the supply to curb a surge in petroleum prices. Concurrently, the International Energy Agency assured that it stands prepared to take the necessary action, if market conditions require it. (AFP)

US corporate profits rose 11.7% yoy in 4Q11 (6.2% in 3Q11). (Bloomberg)

US: Economy grew at 3% annual rate in 4Q
The economy in the US grew at a 3% annual rate in the last three months of 2011, the same as previously estimated, while corporate profits climbed at the slowest pace in three years, raising the risk that business investment and hiring will cool. The increase in gross domestic product was the biggest in more than a year and followed a 1.8% gain in the prior period, revised figures from the Commerce Department showed yesterday. Consumers may be poised to take a leading role in the expansion as the biggest increase in employment since 2006 gives households the confidence and means to spend. (Bloomberg)

US: Unemployment claims fall to four-year low
Claims for unemployment benefits fell to the lowest since April 2008 and consumer confidence reached the second-highest level in four years, indicating the labor-market recovery is helping sustain demand. Applications for jobless insurance dropped by 5,000 last week to 359,000, the Labor Department said yesterday. The Bloomberg Consumer Comfort Index was little changed at minus 34.7 in the period to 25 March, close to the minus 33.7 reading two weeks earlier that was the strongest since March 2008. (Bloomberg)

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