Japan upgrades q3 GDP
Japan’s economy, the world’s third-largest, shrank less than initially estimated in the third quarter, bolstering a view that it is slowly recovering from COVID-19 doldrums even as large export markets show further signs of weakening.
Separate data showed the economy had recorded its first current account deficit in eight years in October, reflecting high import costs imposed on households and businesses by a decline in the yen’s value to multi-decade lows this year.
The revised 0.8 percent annualised quarterly contraction in the gross domestic product (GDP) released by the Cabinet Office on Thursday compared with economists’ median forecast for a 1.1 percent annualised decline in a Reuters poll and an early official estimate of a contraction of 1.2 percent.
The revision was driven by the upward change in private inventories and compared with a 4.5 percent annualised quarterly gain in the previous quarter.
Japan’s economy unexpectedly shrank in the third quarter as global recession risks, China’s faltering economy, a weak yen and higher import costs hurt consumption and businesses.
China retreats from sweeping zero-covid policies
China has announced wide-ranging relaxations to President Xi Jinping’s contentious zero-Covid restrictions, including for the first time home quarantine, as further evidence emerged of the economic damage from the pandemic controls.
The new measures, outlined on Wednesday by the State Council, China’s cabinet, were foreshadowed by a meeting of the Chinese Communist party’s politburo that emphasised the importance of stabilising the economy rather than the battle against Covid-19.
They include the first explicit endorsement from the central government of isolating asymptomatic or mild coronavirus cases at home rather than at hospitals or centralised quarantine facilities. Some local governments had experimented with similar measures in recent days.
The State Council also said people should not have to show proof of a negative test before entering most public places — a relaxation recently implemented by cities including Beijing and Shanghai despite concerns that the rapid spread of Covid could overwhelm the medical system, especially in poorer rural areas.
Bangladesh sees economic ray of light
Rebounding exports and remittances have raised hopes that Bangladesh can avoid a more severe economic crisis, marking a rare positive turn in a South Asia region that has struggled badly this year.
Export earnings in November came to a record $5.092 billion, up 26 percent on the year and well above October’s $4.356 billion, according to statistics released by the Export Promotion Bureau. The figure topped the previous all-time high — $4.9 billion in December 2021 — despite concern about the impact of a global economic slowdown.
Meanwhile, remittance inflows, another key source of foreign currency for Bangladesh, rose in November to $1.59 billion, up from $1.55 billion in the same month a year earlier and beating the previous two monthly figures.
Both developments are encouraging for a country that saw its foreign exchange reserves fall to $33.78 billion as of the end of November, down from $48 billion in August 2021. Under the International Monetary Fund’s stricter calculation method, reserves were even lower, at $25.78 billion. To replenish its coffers, Bangladesh is waiting for the first installment of $4.5 billion in budget support loans from the IMF, expected in February.
India’s economy to grow at 6.9pc in fy23
The Indian economy has demonstrated resilience despite a challenging external environment and is set to grow at 6.9 percent in 2022-23, the World Bank said on Tuesday, raising its forecast of 6.5 percent growth made in October.
The multilateral agency, however, lowered its India growth forecast for next fiscal to 6.6 percent from 7 percent made earlier.
While the deteriorating external environment will weigh on India’s growth prospects, the economy is relatively well positioned to weather global spillovers compared to most other emerging markets, the World Bank said in its latest India development update titled ‘Navigating the Storm.
The impact of a tightening global monetary policy cycle, slowing global growth and elevated commodity prices will mean that the Indian economy will experience lower growth in 2022-23 compared to 2021-22, World Bank said in a statement.
Despite these challenges, India is expected to register strong GDP growth and remain one of the fastest growing major economies in the world, due to robust domestic demand, the statement said.
UK and Indonesia trade and investment opportunities
The UK and Indonesia have established diplomatic relations since 1949 with bilateral trade reaching just over US$2 billion in 2021. Prior to the pandemic, annual bilateral trade reached approximately US$3.8 billion.
Indonesia enjoyed a trade surplus of more than US$2 billion in 2021, which was dominated by footwear products (US$231 million), wood and articles of wood (US$191 million), animal, and vegetable fats, and oils, (US$94 million), lighting signs and prefabricated buildings (US$78 million), and furniture (US$78 million).
UK exports to Indonesia for the same year included machinery, nuclear reactors, and boilers (US$150 million), vehicles and tramways (US$104 million), the pulp of wood (US$99 million), pharmaceutical products (US$65 million), and iron and steel products (US$59 million).
The UK is seeking to forge greater economic and security links with the Indo-Pacific region and plans to spend up to 500 million GBP (US$606 million) on green infrastructure projects in Indonesia, Vietnam, the Philippines, Cambodia, and Laos over the next five years. Moreover, the UK is also seeking to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and will be the first European country to do so if it succeeds.
Malaysian economy to remain resilient against ‘wall of worry’ next year
MIDF Research said it is cautiously optimistic that Malaysia’s economy will remain resilient amid the various headwinds expected next year and able to climb the “wall of worry” in 2023 with the support of robust domestic demand.
Director and head of research Imran Yassin Md Yusof said MIDF foresees Malaysia’s gross domestic product (GDP) growth moderating to 4.2 percent in 2023 from the 8.0 percent expected for this year, mainly due to a deceleration in external trade performance amid a global slowdown and rising interest rates.
“However, MIDF Research is optimistic that the domestic demand will provide support to the economy, fuelled by continuous upbeat consumer spending, moderation in price pressures, further improvement in tourism-related activities and a possible revival of infrastructure projects,” he told a media briefing on next year’s market outlook.
He said inflationary pressures have been the key feature for this year due to the spillover of strong demand last year and exacerbated by the unexpected Ukraine-Russia conflict, resulting in high commodity prices while the intermittent lockdowns in China caused supply chain disruptions.
Sri Lanka plans deal with Maldives
Sri Lanka’s cabinet of ministers had cleared a plan to enter into a deal with Maldives to counter illegal migration and tighten border controls.
The Minister of Public Security had proposed to enter into memorandum of understanding agreement with Maldives immigration authorities to prevent “informal migration, human trafficking” and also tackle “blacklisted travelers”, a government statement said.
The plan also involves facilities for capacity in technology and human resources.
Nepal opens nighttime business
After almost a decade and a half, the Nepali authorities have adopted a “liberal policy” to allow nighttime businesses across the country to flourish, thereby giving a boost to economic activities.
Kathmandu’s chief district officer Ghanshyam Upadhyay said that they have fixed the time for conducting various nighttime businesses in the capital, Kathmandu.
As per the decision, the liquor shops are now allowed to stay open till 10 pm. Similarly, restaurants have been permitted to open until 12 midnight and the dance bars and clubs are allowed to operate till 4 am.
Economists say it’s a landmark decision because the local economy benefits a great deal from a vibrant nightlife. But the policy is still restrictive.
“The decision to allow the businesses to remain open for longer will promote tourism as well as increase job opportunities in the country,” said Upadhyay.
Since the start of the Covid pandemic, Nepal is going through an economic slowdown with most of the economic indicators remaining below par. The situation has further been exacerbated by the Russia-Ukraine war, which has fueled inflation across the world.
As a result, tourist movement has slowed down globally, including to Nepal.
Nepali authorities for a long time have been averse to nighttime businesses, citing various reasons, including security.
The Ministry of Home Affairs has also permitted nighttime business across the country, depending on the security situation prevailing in the districts.
Philippine economic update: bracing for headwinds, advancing food security
Driven by the release of pent-up demand from consumers, the Philippine economy is projected to surge to a 7.2 percent growth in 2022 before tapering off to an average of 5.7 percent growth in 2023, according to the Philippines Economic Update (PEU) released by the World Bank.
This year’s forecast rides on the momentum of a 7.7 percent growth in the first three quarters of 2022, buoyed by the removal of remaining restrictions on people’s mobility and business operations and the recovery of incomes and jobs. The reopening has benefitted the services sector, and government spending on infrastructure fueled the growth of construction and industry.
The forecast for 2023 is premised on reduced consumer demand, alongside high inflation and high interest rates that are expected to temper household spending and investments.
Higher interest rates will likely constrain growth of private lending and investments at a time when public spending will likely slow as the country undertakes “fiscal consolidation” or implements measures to rein in government deficits and reduce debt. Also, as global growth is expected to decelerate next year, external demand from advanced economies, which are key buyers of Philippines merchandise exports, will be subdued.
Singapore economy to grow ‘markedly slower’ in 2023
Singapore’s economy will expand “markedly slower” in 2023, the UOB Group projected due to external economic conditions that could hit the manufacturing and services sector.
UOB expected Singapore’s gross domestic product to grow by 0.7 percent in 2023, which is closer to the lower end of its 0.5 percent 02.5 percent forecast range.
“Our 2023 outlook is largely premised on broad moderation in external economies next year, and we project the US and European economies (which are key end markets for Singapore) to enter into a recession in the next 6-12 months amidst aggressive monetary policy tightening stance among these advanced economies,” the report read in part.
“This will directly impact the manufacturing and external-oriented services sectors.”
Vietnam’s rail network: slow train headed for fast-track?
Spanning the breadth of the Red River, Long Bien Bridge, built by the French over a century ago, was once a key arterial for the city of Hanoi.
Largely replaced by road transport and air travel, however, it now stands rusted and decayed, remnants of a by-gone era in which rail ruled supreme.
Indeed, Vietnam’s rail network has struggled to keep up with the country’s rapid economic growth. It is, however, now teetering on the cusp of being reborn, as Vietnam’s infrastructure and logistics enter a new phase of development.