The Malaysian Institute of Economic Research (MIER) has revised upwards its growth outlook this year, from 3.7% to 4.2%, on improving consumer and business confidence levels in the first quarter. Executive director Dr Zakariah Abdul Rasheed said improved production and sales numbers are expected to follow suit in the second quarter. (BT)
Economy: MIER says no need for interest rate hike
The continued easing of inflationary pressure amidst elevated oil and commodity prices will not spur policymakers here to adjust the benchmark interest rate up as growth remains the priority. Malaysian Institute of Economic Research (MIER) executive director Dr Zakariah Abdul Rashid said any rate hike by Bank Negara would depend on a surge in prices and that has not happened. (StarBiz)
Economy: MIER says minimum wage won’t cure dependence on foreign labour
MIER says that the minimum wage policy will not resolve the country’s over-reliance on foreign labour. It said, on the contrary, the policy could prove to be a magnet for foreign labour. It reasoned that should the minimum wage policy exempts foreign workers, employers are likely to turn to foreign workers as they will remain the cheaper alternative to the domestic workforce. On the other hand, if foreign workers are covered by the minimum wage rule, the increased wages will be a strong pull factor that is likely to lure foreign workers to Malaysia. (Financial Daily)
Motor vehicle sales for March 2012 decreased by 9,681 units to 53,583 units from 63,264 in March last year, the Malaysian Automotive Association (MAA) announced. However, it said for the second consecutive month, mom sales volume expanded with sales in March this year to 9,570 units or 21.7% higher than the previous month. The higher sales volume in March was contributed by consumer sentiment, which continued to remain positive, and the introduction of new models and a longer working month. For the first three months of this year, total vehicle sales amounted to 138,544 units, down from 158,432 units in the corresponding period last year. MAA expects the sales trend for April to be similar to March. (Bernama, Financial Daily)
Singapore’s non-oil domestic exports fell unexpectedly in Mar by 4.3% yoy, reversing the revised 30.4% gain in Feb due to an absence of high-value deliveries from its shipyards. Economists expected an 8.2% expansion. Electronics shipments grew 2.8% yoy in Mar (23.3% in Feb), whilst non-electronics shipments fell 7.8%. (Bloomberg, WSJ)
India: Cuts key rates as growth risks trump inflation
India slashed its benchmark interest rate by a greater-than-forecast half a percentage point, seeking to bolster growth with the first reduction since 2009. Inflation might limit the room for further cuts, the central bank said. Governor Duvvuri Subbarao lowered the repurchase rate to 8% from 8.5%, the Reserve Bank of India said. The outcome was predicted by three of 25 economists in a Bloomberg News survey. Seventeen expected a 0.25 percentage-point cut and the rest predicted no change. (Bloomberg)
Japan’s industrial output fell by a revised 1.6% mom in Feb (a revised 0.9% in Jan; 2.3% in Dec 2011) on the back of a slowdown in machinery and auto output. Capacity utilisation contracted 1.7% mom in Feb (+3.4% in the earlier reading). (AFP)
Japan’s sentiment index for general households rose in Mar to 40.3 (a revised 39.9 in Feb; 39.9 in Jan), the highest level since Feb 2011, helped by hopes for support from post-quake reconstruction. (Reuters)
Japan: Will provide USD60bn to expand IMF crisis funding
Japan said it will provide USD60bn to the International Monetary Fund’s effort to expand its resources and shield the global economy against any deepening of Europe’s debt crisis. Finance Minister Jun Azumi unveiled the commitment in speaking to reporters in Tokyo before semiannual meetings of the IMF and World Bank in Washington 20-22 April. Azumi said he hopes for an early agreement among Group of 20 members, who will also gather in Washington, on contributions to the IMF. (Bloomberg)
FDI in China fell 6.1% yoy in Mar to US$11.76bn (-0.9% in Feb), the fifth consecutive month of decline on the back of external and domestic weaknesses. Analysts had expected a 13.6% decrease. In 1Q12, the measure hit US$29.48bn, down 2.8% yoy (+29.4% in 1Q11). (Bloomberg)
Greece raised €1.625bn in three-month debt at 4.20%, a slightly lower rate than during the last comparable operation’s 4.25%, the national debt management agency said, adding that the demand this time was 2.5 times the amount on offer. (AFP)
EU: Euro-area March inflation rate exceeds estimate on energy
European consumer prices increased at a faster pace than initially estimated in March, driven by energy costs, complicating the European Central Bank’s task as it tries to push the inflation rate below its 2% limit. Inflation in the 17-nation euro region held at 2.7% for a fourth month, the European Union’s statistics office in Luxembourg said. That’s higher than the estimate of 2.6% published on 30 March. (Bloomberg)
US: Factories cool for first time in four months
Production at US factories dropped in March for the first time in four months as the industry cooled following the strongest surge in three decades. Manufacturing, which makes up about 75% of industrial output, decreased 0.2% last month as appliance and furniture makers cut back, data from the Federal Reserve showed. The decline followed a revised 3.4% gain from December through February that marked the biggest three-month jump since March 1984. (Bloomberg)
US industrial production experienced no change on a mom basis in Mar, same with Feb but less than the 0.3% consensus estimate. Capacity utilisation came off slightly to 78.6% from a revised 78.7% in Feb, matching consensus. Manufacturing declined 0.2% from a revised 0.8% in Feb, worse than consensus of a 0.3% gain. (Bloomberg)
US: Housing starts in US unexpectedly fall to five-month low
Builders began work on fewer homes than forecast in March, signalling a sustained industry recovery will take time to get underway. Housing starts dropped 5.8% to a 654,000 annual rate, less than the lowest estimate of economists surveyed by Bloomberg News and the least since October, Commerce Department figures showed. The slump was led by the volatile multifamily category, which at the same time showed a jump in permits, a proxy for future construction. (Bloomberg)
IMF Raises Global Forecast for First Time Since Early 2011
The International Monetary Fund raised its global growth forecast for the first time in more than a year, with the US boosting the outlook while recent improvements remain “very fragile.” The world economy will expand 3.5% this year, compared with a January projection of 3.3%, the Washington-based IMF said in its World Economic Outlook. It sees growth of 4.1% in 2013, up from 4.0%. It raised its forecasts for the US to gains of 2.1% this year and 2.4% in 2013. (Bloomberg)
US stocks post biggest rally in one month amid global optimism
US stocks rose, giving benchmark indexes the biggest rallies in a month, as higher forecasts from the International Monetary Fund and gains in Spanish bonds overshadowed declines in housing starts and factory production. The Standard & Poor’s 500 Index rose 1.6% to 1,390.78, after falling 1.3% in two days. The Dow Jones Industrial Average added 194.13 pts, or 1.5%, to 13,115.54. The Nasdaq Composite Index climbed 1.8% to 3,042.82. About 6bn shares changed hands on US exchanges, or 11% below the three-month average. (Bloomberg)
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