20120829 1014 Local & Global Economy Related News.

Measures introduced to control runaway  house prices have not been totally effective and new fiscal policies may be introduced in the 2013 Budget, said Housing and Local Government Minister Datuk Seri Chor Chee Heung. Despite measures such as an increase in the real property gains tax (RPGT) and a cap on loan-to-value ratios on third properties and above, there was a “feeling that the government has not done enough”, he said.  Chor added however that the government wanted to ensure a sustainable property market that did not suffer from asset bubbles and also to ensure that household debt remains at healthy levels. (Malaysian Insider)

Housing and Local Government Minister Datuk Seri Chor Chee Heung has suggested that the current household income criteria for applications under the  People’s Housing Programme  (PPR) be revised upwards. Currently PPR is open to those with a monthly household income of no more than RM2,500 to purchase low-cost property. To enable more accessibility to PPR housing, may be the maximum household income should be increased to around RM3,000 so that more people have a chance to apply, he said.  According to Household Income and Basic Amenities Survey Report 2009, Chor said 58% of households in the cities earned less than RM4,000 per month including 44.5% earning less than RM2,500.  He said the government was expected to allocate more affordable housing projects such as the PPR and the 1Malaysia People’s Housing Project (PR1MA) in the coming budget. (Financial Daily, The Star)

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said  Budget 2013 will focus on the people's prosperity and the country's economic growth to face the short- and long-term economic challenge besides maintaining the existing fiscal policy. He said the two focus areas form the bases of the economic policy practised since the time Malaysia began to abandon the free market principles introduced by the British colonial rulers. (Bernama)

The Malaysia-China Chamber of Commerce expects bilateral trade between Malaysia and China this year to exceed US$100bn (US$90.3bn in 2011), said its Secretary-General, Youth President and General Affairs Chairman, Joseph Lim. “Most of our consumer products and even services are imported from China,” he said. Malaysia exports a lot of electronic parts and natural resources such as petroleum, palm oil, rubber and timber to China, he added. (Bernama, Financial Daily)

Malaysia exported RM141.2bn worth of  commodities last year, up 24% against RM114.1bn in 2010, said  Plantation Industry and Commodity Minister Tan Sri Bernard Dompok. Smallholders solely accounted  for the country’s cocoa and pepper produce, 90% of rubber production and 40% of crude palm oil output, he said. (Financial Daily)

Malaysia's retail industry recorded sales growth of 6.9% in 1Q12, which was lower than retailers' initial forecast of 12.1%, according to  Retail Group Malaysia. “The retail result of the first three months of this year was positive because of several incentives introduced by the Government since late last year,” Retail Group Malaysia MD Tan Hai Hsin said in the latest Malaysia Retail Industry Report.  As for  the 2Q12, Tan said members of the retailers' association remained optimistic of their businesses during the period. “They expect their sales to rise by 11.7% compared with the same period in 2011. However, Retail Group Malaysia is expecting a lower growth  rate of 5.5% only. This is due to poor economic prospects during the 2Q12 as well as higher base achieved in 2011 at 9.1%,” he said.  For the third quarter, Tan said the growth rate is estimated at 6% due to Hari Raya celebration.  Retail Group Malaysia is forecasting the retail industry to expand by 5.5% in the 4Q12. (The Star)

The  Group of Seven nations called on  oil-producing countries to increase output and is monitoring the threats to their economies posed by high oil prices, according to a joint statement issued today by the U.S. Treasury Department. (Bloomberg)

The US ICSC-Goldman Store Sales index rose 0.5% wow in the 25 Aug week (-1.5% in the earlier week), whilst on a yoy basis, the gauge gained 3.4% (3.1% in the prior week). (Bloomberg)

The  US S&P Case-Shiller home price index  gained 0.9% mom in Jun, matching the previous month’s pace and is almost double the 0.4% expected by economists. On a non-seasonally adjusted, yoy basis, the measure increased 0.5%, reversing the -0.7% in May and is better than consensus of no change. (Bloomberg)

The  US Conference Board consumer confidence index  fell roughly 5 points to 60.6 in Aug (a revised 65.4 in Jul), worse than consensus of 65.8. (Bloomberg)

Eurozone M3 money supply grew 3.8% on an annual basis in Jul (3.2% in Jun), overshooting consensus of 3.2%. (RTTNews)

Japan’s small business confidence fell to 44.8 in Aug (46.6 in Jul), the fifth straight month of decline. (RTTNews)

Japan's government downgraded its  assessment for the export-reliant economy as slowing global growth weighed on exports and factory output, and threatened recovery prospects. (Reuters)

A proposed direct-tax law, which aims to simplify tax procedures and improve compliance, which India is framing may require a fresh look, indicating more modifications that could delay the implementation of the new rules. The government had earlier said it would implement it on 1 Apr 2013. (WSJ)

The  International Monetary Fund has credited the  Bank of Thailand's inflation-targeting framework with mitigating the economic impact from the three major shocks that occurred from 2008-11. (Bangkok Post)

Thailand’s manufacturing production index declined 5.8% yoy in Jul (-9.6% in Jun). Total capacity utilization ticked higher to 66.8% from 66.3% in Jun. (Bloomberg)

The Indonesian government has allocated US$20bn for  infrastructure development next year to boost national economic growth. (Jakarta Globe)

The  rupiah weakened to beyond Rp9,500/US$ after  Bank Indonesia governor Darmin Nasution said the nation’s currency had reached a “new equilibrium.” (Jakarta Globe)

The number of foreign tourists who visited Vietnam reached 4.38m in the first eight months of this year, up 9.4% against the same period last year. (Vietnam News)

Imports to the Philippines rose 13.3% yoy in Jun (10.1% in May) to US$5.1bn. The trade deficit widened to US$787m from US$454m in May. (Bloomberg)