20121009 0945 Local & Global Economy Related News.

Malaysia: 2012 growth forecast raised
The World Bank has raised its growth outlook for the Malaysian economy from 4.6% to 4.8% in 2012. However, it lowered the growth outlook for 2013 from 5.1% to 4.6%. The revised outlook follows the Asian Development Bank which has also changed its Malaysian outlook to 4.6% for 2012. In April, the World Bank projected Malaysia was likely to grow at 4.6% in 2012 and, assuming global recovery continues, 5.1% in 2013. In its latest East Asia and Pacific Economic Data Monitor which was released in Singapore yesterday, it said economic growth in the East Asia and Pacific region may slow down to 7.2% this year before recovering to 7.6% in 2013. The new report says that weak exports and lower investment growth will cut down China's gross domestic product (GDP) growth from 9.2% in 2011 to 7.7% this year. (Bloomberg)

Global: IMF sees ‘alarmingly high’ risk of deeper global growth slump
The International Monetary Fund (IMF) cut its global growth forecasts as the euro area‟s debt crisis intensifies and warned of even slower expansion unless officials in the U.S. and Europe address threats to their economies. The world economy will grow 3.3% this year, the slowest since the 2009 recession, and 3.6% next year, the IMF said yesterday, compared with July‟s predictions of 3.5% in 2012 and 3.9% in 2013. The Washington-based lender now sees “alarmingly high” risks of a steeper slowdown, with a one-in-six chance of growth slipping below 2%. (Bloomberg)

India: Growth to drop to decade low amid high inflation, IMF says
Indian growth may weaken to a decade-low this year after investment stalled, the International Monetary Fund said, as it called for interest rates to remain unchanged until the nation‟s high inflation rate eases. Gross domestic product will rise 4.9% in 2012, less than a July forecast of 6.1%, the Washington-based lender said in its World Economic Outlook report yesterday. The expansion will accelerate to 6% next year, it said, helped by improving overseas markets and a boost to confidence from a recent government policy revamp. (Bloomberg)

Europe: Starts USD648bn aid fund, rules out immediate use
European governments set up a full- time EUR500bn (USD648bn) fund to aid debt-swamped countries and, not for the first time in the three-year crisis, expressed confidence that the extra financial muscle won‟t be needed anytime soon. Finance ministers from the 17 euro countries declared the European Stability Mechanism operational, while saying that Spain, its biggest potential near-term customer, isn‟t on the verge of tapping it. Decisions were also put off on Greece‟s next aid payment and on an assistance program for Cyprus. (Bloomberg)

UK: House price index rises to six-month high on credit plan
A UK house-price index rose to its highest in six months in September as measures to boost credit prompted real-estate agents to become less pessimistic about the outlook, the Royal Institution of Chartered Surveyors said. The gauge rose to -15 from -18 in August, London- based RICS said in an e-mailed report yesterday, citing a monthly poll of property surveyors. A result below zero means more saw values drop than increase last month. A measure of price expectations also climbed to its highest since March. The Bank of England started its Funding for Lending plan in August to boost credit by giving banks access to cheaper finance. Still, Britain‟s property market remains under pressure as the economy struggles to recover from a recession and the euro-area debt crisis undermines consumer confidence. (Bloomberg)

US: Business hiring calms concerns about US fiscal cliff
Business hiring is holding up, allaying concerns about a U.S. economic downdraft in the face of a looming fiscal cliff. Companies added an average 121,000 workers a month in the third quarter, up from 88,000 in the second quarter, according to Labor Department figures released on 5 Oct. Total payrolls, including government, increased an average of 146,000 a month, compared with 67,000 in the prior period. (Bloomberg)