Bank Negara Malaysia's (BNM) inflation forecast of 2-3% still remains despite the introduction of the minimum wage, which represented a small part of production cost and would not contribute to higher prices particularly when the country was in a period of moderating prices, said Governor Tan Sri Dr Zeti Akhtar Aziz. The minimum wage was positive, as it would contribute to an increase in consumption as the group it catered to have a high propensity to consume, she said. "We have already priced in the prospect of the minimum wage,” she added. Asked on the impact of European banks deleveraging in Asia, she said most countries in Asia would be affected but to a "limited extent" because there was ample liquidity in the region. “Our financial sector can step in, not only banks but also the financial markets which are more developed, to provide the liquidity," she said. (Bernama, BT)
Malaysia's national debt at the end of last year stood at RM257.2bn or 30.2% of GDP, the Dewan Negara was told yesterday. Deputy Finance Minister Datuk Donald Lim Siang Chai said the national debt or external debt was debt borne by the country following loans obtained by the government and private sector from overseas sources. The Federal Government's total debt was RM456.1bn or 53.5% of GDP in 2011 with RM438bn or 96% was domestic debt while the balance RM18.1bn or 4% was external debt. (Bernama)
The Senate Tuesday passed the Income Tax (Amendment) Bill 2012, Financial Reporting (Amendment) Bill 2012 and Labuan Companies (Amendment) Bill 2012. The Income Tax (Amendment) Bill 2012 seeks to allow taxpayers to claim for deductions for donations for religious purposes and also allow a taxpayer to claim for deductions for contributions to the construction, improvement or maintenance of a public building for religious purposes. The Financial Reporting (Amendment) Bill 2012 seeks to enable the Financial Reporting Foundation to oversee the functions of the Malaysian Accounting Standards Board and to allow the Securities Commission and Bank Negara to modify accounting standards to ensure financial stability. The amendment of the Labuan Companies (Amendment) Bill 2012 would become a catalyst for foreign investment in Labuan. (Bernama)
The Senate on Monday passed the Supplementary Supply Bill (2011) 2012, the Construction Industry Payment and Adjudication Bill 2011 and the Mediation Bill 2012. The Supplementary Supply Bill (2011) 2012 provides an additional supply of RM10.29bn to several ministries and departments for the provision of services. The Construction Industry Payment and Adjudication Bill 2011 is aimed at facilitating payment, solving disputes through adjudication and providing a remedy to expedite payment in the construction industry. The Mediation Bill 2012 is aimed at enhancing mediation as an alternative to resolve disputes in a fair, speedy and cost effective manner. (Bernama)
The government is confident of achieving the target of 30% Bumiputera equity ownership by 2020 despite the current global economic uncertainty, said Minister in the Prime Minister's Department, Tan Sri Nor Mohamed Yakcop. The confidence is based on growing demand for Malaysian products in China and India, as well as on the government's economic transformation programmes and policy, he said. (Bernama)
There is a need to raise gas and electricity tariffs but it is for Cabinet to decide, Energy, Green Technology and Water Minister Datuk Seri Peter Chin said. The six-month interval of tariff revision for gas and electricity has not changed. The policy was not scrapped. The ultimate decision on whether or not to raise the tariffs lies with the Cabinet, he said. “Right now, gas supply to the power-generation sector is priced at RM13.70/mmBTUm while the international market price is around RM40/mmBTU, he added. The last price hike in gas and electricity was on 1 Jun 2011 with natural gas price sold to the power sector was raised 28% to RM13.70/mmBTU from RM10.70/mmBTU. The average electricity tariff went up 2.23 sen/kWh, or 7%, to 33.54 sen/kWh. (BT)
The financial industry in Asia is well-positioned to benefit from continued favourable growth prospects, supported by productive economic activity, strong regulatory and supervisory systems, financial inclusion agenda and broader mandate by central banks and regulatory authorities. Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said new initiatives are being pursued to enhance surveillance with crisis management tools in place to enable swift responses to emerging risks and vulnerabilities in the financial system, including those within the traditionally unregulated segments of the system. Authorities in Asia are also continuing to refine and sharpen the efficacy of 'macroprudential' instruments to manage excesses and imbalances in the financial system. Asia already has considerable experience with these instruments during periods of escalating asset prices and excessive financial market volatility, she said. (The Sun)
Thailand prices of consumer products are high because of seasonal factors, Commerce Minister Boonsong Teriyapirom said. The government will maintain contributions to energy funds, including those for petrol, gasohol and diesel fuel. It has also agreed to delay MRT fare adjustments, which are due to rise on 3 Jul. (Bangkok Post, The Nation)
The downturn in the HSBC purchasing managers index for Vietnam in Apr 2012 slowed down to 49.5 points, as manufacturing output decreased while export turnover improved. (Shanghai Daily)
Indonesia: Worst rupiah start since 2005 pressures Indonesia to undo easing
Indonesia’s central bank will probably consider steps to curb excess funds in the economy and extend a pause in interest-rate cuts as the second-worst performing currency in Asia highlights the threat from inflation. Bank Indonesia will keep the reference rate at 5.75% tomorrow, according to all 21 economists surveyed by Bloomberg News. The central bank has left its benchmark unchanged since an unexpected reduction in February. (Bloomberg)
Australia: Trade deficit widest since October 2009
Australia’s trade deficit widened in March to the biggest in almost 2 1/2 years as a 5% rise in imports outpaced export growth in an economy driven by the mining industry. Imports outpaced exports by AUD1.587bn (USD1.6bn), from a revised AUD754m deficit in February, the Bureau of Statistics said. The gap was the widest since a AUD1.595bn shortfall in October 2009 and exceeded the AUD1.3bn median estimate in a Bloomberg News survey of 20 economists. (Bloomberg)
Germany: Industrial output rose three times more than forecast
German industrial output rose more than three times as much as economists forecast in March, adding to signs Europe’s largest economy may have avoided recession. Production jumped 2.8% from February, when it dropped 0.3%, the Economy Ministry said. February output was revised up from a 1.3% decline. Economists forecast a March gain of 0.8%, the median of 38 estimates in a Bloomberg News survey shows. In the year, production advanced 1.6% when adjusted for working days. (Bloomberg)
Confidence among small businesses climbed as the National Federation of Independent Business’ optimism index rose to 94.5, the highest since Feb 2011, from 92.5 the previous month. (Bloomberg)
According to a survey by the Institute for Supply Management, purchasing managers at US factories said they anticipate sales will grow 4.5% this year, less than a 5.5% Dec prediction. (Bloomberg)
US: Factories in US grew less optimistic about sales, ISM says
Manufacturers in the US became less-optimistic about 2012 sales growth than at the end of last year, while service companies grew more upbeat, according to a survey by the Institute for Supply Management. Purchasing managers at US factories said they anticipate sales will grow 4.5% this year, less than a 5.5% December prediction, according to the Tempe, Arizona-based group’s semi-annual forecast issued. By contrast, service providers estimated revenue will climb 4.8% this year, up from the 3.1% forecast in December. (Bloomberg)
US: Job openings rise to highest level since 2008
Employers in the US were seeking to fill more jobs in March than at any time in almost four years, showing growing confidence in the US economy. The number of open positions increased by 172,000 to 3.74m, the most since July 2008, from a revised 3.57m the prior month that was larger than previously estimated, the Labor Department said. (Bloomberg)
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