Asian Economy: Overview, Growth & Development

Bank Indonesia holds rates

Indonesia’s central bank left its benchmark interest rate unchanged at a record low as the economy begins to show signs of recovery from the country’s worst coronavirus wave.

Bank Indonesia held the seven-day reverse repurchase rate at 3.5 percent on Tuesday, as expected by all 31 analysts in a Bloomberg survey. The key rate has been at that level since February, and central bank Governor Perry Warjiyo has signaled the bank could remain on hold until at least until year-end.

Thailand lifts debt-to-gdp cap to 70pc

Thailand will raise its public debt ceiling to accommodate higher borrowing and spending to help support the economic recovery from the pandemic.

The limit on the debt-to-gross domestic product ratio will be increased to 70 percent from 60 percent to allow the government to borrow more if necessary, Finance Minister Arkhom Termpittayapaisith said after a meeting Monday in Bangkok of the nation’s fiscal and monetary policy committee, which is chaired by Prime Minister Prayuth Chan-Ocha. The new limit will become effective once it’s notified in the Royal Gazette, though no timeframe was immediately specified.

Missing links in Nepal’s MCC debate

The Millennium Challenge Corporation (MCC) Compact was signed in September 2017 between the US aid agency and the government of Nepal promising $500 million worth of funding, with Nepal matching another $130 million. Its stated objective is to ‘increase the availability of electricity and lower transportation costs —helping to spur investments, accelerate economic growth, and reduce poverty’. Over the last four years of contentious debate and polarising ideological arguments, it continues to await endorsement by Parliament.

India, Malaysia top Asian forecasts for faster economic growth in 2022

Economic activity next year in Malaysia and India, two of the countries most affected by Covid-19 outbreaks in recent months, is expected to recover faster than earlier forecast, latest surveys show. Malaysia’s growth outlook was upgraded by the most in the region – 85 basis points to an expansion of 5.65 percent next year, according to the latest survey results compiled by Bloomberg. India was a close second, with its economy expected to grow 6.7 percent, 80 basis points faster than previously seen.

China’s property slowdown sends chill through the economy

Until just a few weeks ago, sales at three residential developments in the eastern Chinese city of Jinan were booming. But in September, traditionally one of the busiest months for purchases of new homes, the mood has soured.

Sales at the projects are flat or declining as authorities tighten access to mortgages, and developers are now offering discounts in an attempt to shift the units — even if it leads to a small loss.

“Government policy doesn’t support home purchases,” said Zhou Miao, a property agent at the Jinan branch of PowerChina Real Estate Group. “Many people have put off their house purchase plans until next year in the hope the authority relaxes credit controls.”

Where the Indian economy stands

The Covid-19 outbreak and stringent lockdowns over the last 18 months made the Indian economy contract for the first time in more than 40 years. But despite a devastating second wave in April, the economy has since shown signs of improvement, partly driven by increased demand for Indian products, which has led to growth in exports and factory output. Business activity has largely recovered to pre-pandemic levels, but the challenge is to maintain that trajectory. And while the supply of most goods has stabilized, economic growth can only be sustained if consumer demand grows considerably.

India’s GDP surged 20.1 percent in the April-June quarter—that’s the fastest pace since the mid-1990s when official quarterly data first became available. It came from a low base, admittedly, with the economy having shrunk by 24.4 percent in the same period in 2020.

Bangladesh bourses give highest return among peers

Bangladesh’s capital market is giving the highest return among its peer countries and is ready to catch up with the country’s real economic growth. So, it is the best time for foreign investors to board with the fast-growing capital market, said, Shibli Rubayat-Ul-Islam, chairman at the Bangladesh Securities and Exchange Commission (BSEC) at the roadshow titled “The Rise of Bengal Tiger: Potentials of Trade and Investment in Bangladesh” on Monday.

Japan’s land prices fall

Japanese land prices fell for the second straight year as the country’s closed borders and state of emergency curbs to combat the coronavirus pandemic hit demand for new restaurants and hotels, an annual government survey showed. In a sign the pandemic is reshaping the economy, however, land prices for industrial areas rose for the fourth straight year on booming demand for warehouses to stock up on electronic appliances and other goods catering to stay-at-home demand. Overall property prices in the world’s third-largest economy fell 0.4 percent in the year to July after last year’s 0.6 percent decline, which was the first fall in three years, a land ministry survey showed on Tuesday. Residential land prices, which have been falling for nearly three decades due to Japan’s shrinking population, slid 0.5 percent after a 0.7percent decline in the previous year, the survey showed.

E-Payments continue to drive the Philippine economy post-pandemic

The government of the Philippines has made e-commerce and electronic payment methods a priority in efforts to boost both financial and digital inclusion throughout the country. In line with this, the Bangko Sentral ng Pilipinas (BSP) recently reaffirmed that they will continue to promote the digitalisation of financial products and services in the country even after the restrictions forced by the pandemic are lifted. Last year, the central bank released the Digital Payments Transformation Roadmap (DPTR) for 2020-2023. Under the DPTR, the BSP aims to increase customer preference for digital payments by converting 50 percent of total retail payments to digital form and increasing the number of financially included Filipino adults to 70 percent by on boarding them to the formal financial system via payment or transaction accounts.

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