Improving Japan business mood signals steady economic recovery
Japanese business sentiment improved in the second quarter as raw material costs peaked and removal of pandemic curbs lifted consumption, a central bank survey showed, a sign the economy was on course for a steady recovery.
Companies expect to increase capital expenditure and project inflation to stay above the Bank of Japan’s 2 percent target five years ahead, the quarterly “tankan” showed on Monday, offering policymakers hope that conditions for phasing out their massive monetary stimulus may be gradually falling into place.
“The tankan confirmed our view that Japan’s economy is on track for a moderate recovery,” said Atsushi Takeda, chief economist at Itochu Economic Research Institute.
“While input prices have declined, output prices continue to rise in a sign companies are being able to pass on costs. That’s a good sign for the BOJ’s inflation outlook and may prod the bank to tweak its yield control policy later this year.”
The Headline index measuring big manufacturers’ mood stood at plus 5 in June, bouncing back from a two-year low of plus 1 hit in March in a sign firms were recovering from the hit from rising raw material costs and supply disruptions.
China services growth softens in fresh sign of weakness
Expansion in China’s services industry slowed in June from the previous month, according to a private survey, providing more evidence that the key driver of the country’s post-Covid recovery is cooling.
The Caixin China services purchasing managers’ index declined to 53.9 from 57.1 in May, Caixin and S&P Global said in a statement Wednesday, the weakest since January and well below the median forecast of 56.2 among economists surveyed by Bloomberg. Any reading over 50 indicates an expansion from the prior month, while a number below that suggests contraction.
The drop indicates the stronger leg in China’s K-shaped economic recovery this year is losing momentum as consumers scale back spending on services such as travel and restaurants amid elevated youth unemployment and a gloomy income outlook. The data will likely spur more calls for the government to ramp up measures to support growth.
In India, desperate kidney sellers scammed on facebook
One Morning in February 2020, a couple of months after she had an accident and was unable to work, Surya decided to sell one of her kidneys. The mother of two girls – already reeling under loans of 500,000 Indian rupees ($6,101) – had been the sole breadwinner since her husband lost his job.
Although she knew the sale of kidneys is illegal in India, she went online on her smartphone and typed in “kidney” and “sell”, and dozens of pages opened up. On a Facebook page Surya found, she put down her number and posted that she needed to sell one of her kidneys.
Days later, she received a call from a man who identified himself as Dr Sandy. He told her the Gitroh Medical Center in Ghaziabad, near the capital New Delhi, was interested in buying her kidney for 10 million rupees ($122,000). It was enough for Surya to repay her debts many times over and pay her family’s expenses for years.
Green economy, security in focus as Indonesia, Australia leaders meet in Sydney
Indonesian President Joko Widodo said strategic cooperation with Australia on electric vehicle batteries was a priority after talks on Tuesday with Australian Prime Minister Anthony Albanese that focused on green economy and regional security.
Widodo, who is in his second and final term in office, wants to build an electric vehicle battery production industry in Indonesia, which has the world’s largest nickel reserves.
The EV industry uses the metal extensively.
Widodo is seeking cooperation from Australia, a major supplier of battery component lithium.
“Indonesia and Australia must build a more substantive and strategic economic cooperation through the joint production of EV batteries,” Widodo told reporters after an annual leaders meeting with Albanese in Sydney.
Widodo told business leaders that the Southeast Asian nation had a target to produce 1 million electric cars and 3.2 million electric motorbikes by 2035.
Uncovering opportunities for clean growth in Malaysia
Over 30 countries across the globe have demonstrated that it is possible to decarbonise while growing national income, including the United Kingdom (UK). This would be helpful for Malaysia to adopt to help achieve its target to reduce carbon intensity against GDP by 45 percent by 2030 and to achieve average 4.7 percent real GDP growth per annum at constant prices through to 2030.
Over the last five years, the UK Foreign, Commonwealth and Development Office (FCDO) has been working with the Malaysian public and private sector to help accelerate climate action in the country. To build on these collaborative initiatives, FCDO and the Department for Business and Trade commissioned our team to develop the Clean Growth Handbook Malaysia.
The Handbook highlights opportunities to introduce or scale clean growth in Malaysia. It also identifies almost 40 collaboration opportunities between Malaysia and the UK across four priority sectors chosen based on their contribution to greenhouse gas emissions: power, transport, buildings and manufacturing. Using insights from our global Green Economy Report, the handbook also identifies nine enablers for clean growth.
Clean growth in Malaysia requires an ecosystem of stakeholders both within and outside of Malaysia to collaborate. We engaged 46 stakeholders in Malaysia and the UK to understand Malaysia’s existing clean growth market and gain insights.
China’s land links with Mongolia will run 24/7
Mongolia plans to increase its number of 24-hour ports and transport links along the border with China, pinning economic-growth hopes on the post-Covid recovery on its southern neighbour, according to a high-ranking Mongolian official.
Port recovery is “one of the pillars” of Mongolia’s economic development, according to the minister in charge of road and transport development, Byambatsogt Sandag, and the country “intends to expose all ports, connect them by road and rail”.
“In the future, we will make Gashuunsukhait, Hangi, Bichigt and Bulgan ports 24-hour operational, which is important for the further expansion of trade and economic cooperation between [China and Mongolia],” he said in a written response to the Post.
Sandag was one of the ministers of the Mongolian delegation that visited China by joining the World Economic Forum held in the northern port city of Tianjin between June 27 and 29.
Philippines’s inflation slows to 5.4pc in June
Annual inflation in the Philippines eased for a fifth straight month in June, supporting expectations the central bank will keep rates unchanged for longer as food and transport cost pressures ease.
The Consumer Price Index rose by 5.4 percent in June, the statistics agency said on Wednesday, its slowest pace since April last year. The central bank, however, noted inflation risks remained tilted to the upside due to the potential effects of the El Nino dry weather conditions and wage increases.
The Bangko Sentral ng Pilipinas (BSP) said the slower pace of price increases was consistent with its expectation inflation will gradually return to its 2-4 percent target in the fourth quarter barring sudden supply shocks.
Last Month’s inflation rate, which was below the 5.5 percent forecast in a poll by the Reuters news agency, brought the year-to-date average to 7.2 percent.
“The BSP stands ready to adjust the monetary policy stance as necessary to prevent the further broadening of price pressures,” the bank said in a statement.
Core inflation, which strips out volatile food and fuel items, slowed to 7.4 percent from 7.7 percent in May.
In Singapore and Hong Kong, Korean dream tempts domestic helpers
When Filipino domestic helper Metchie Oyonoyon first read about South Korea’s plans to open its doors to foreign domestic workers, her mind raced with the possibilities.
Given the chance, Oyonoyon would leap at the chance to relocate from Singapore, where she has worked for the last 10 years, to South Korea.
After finishing her household duties and caring for her elderly employer, Oyonoyon, 39, spends most nights tuning into the latest Korean drama via a streaming website on her smartphone.
Oyonoyon’s favourite Korean dramas include Crash Landing on You, Descendants of the Sun, and The Glory, and she counts herself as a fan of stars such as Song Hye-kyo, Son Ye-jin and Lee Do-hyun.
She often binges on episodes all night because she “wouldn’t be able to sleep” without knowing what happens next.
When Oyonoyon is not watching Korean dramas, she whips up spicy kimchi noodles for herself, follows Korean food bloggers and organises outings to Korean buffet restaurants with her domestic worker friends. She dreams of being able to see South Korea in all its four seasons.
Inflation eases sharply in bankrupt Sri Lanka
Sri Lanka’s inflation eased to 12 percent in June, official data showed Saturday, the lowest figures since the island nation careened into an unprecedented economic crisis last year.
Sri Lanka defaulted on its $46 billion foreign debt in April 2022 and the public endured months of food, fuel, and medicine shortages.
The Crisis has eased since, with the government securing a $2.9 billion bailout from the International Monetary Fund in March.
June inflation was the lowest since the 9.9 percent figure recorded in November 2021.
It is down from 25.2 percent in May and a peak of 69.8 percent in September.
“Inflation is expected to reach single-digit levels by early third quarter 2023,” the Central Bank of Sri Lanka said.
This week, the government unveiled a debt restructuring plan which offers a 30 percent haircut for international sovereign bondholders, who account for more than a quarter of Sri Lanka’s outstanding foreign obligations.
Vietnam second-quarter GDP growth accelerates, slowdown looms
Vietnam on Thursday reported faster economic growth in the second quarter, driven by the services sector, despite a slump in trade that analysts say could signal a slowdown ahead.
Vietnam, a regional manufacturing hub, has been trying to prop up its economy amid slowing global demand, with the central bank cutting its policy rates four times so far this year and lawmakers extending a cut in value added tax.
Gross domestic product (GDP) in the second quarter grew 4.14 percent from a year earlier, faster than the 3.28 percent expansion in the first quarter, the General Statistics Office (GSO) said in a report. First quarter growth was revised down from 3.32 percent.
The Services sector grew 6.11 percent in the second quarter from a year earlier, while the agricultural sector grew 3.25 percent, and the manufacturing and construction sector expanded 2.50 percent, the GSO said.
But Exports in the second quarter fell 14.2 percent from a year earlier due to weak global demand, the agency said, adding that imports fell 22.3 percent.
Analysts say the sharp decline in imports could indicate a slowdown ahead in industrial production, as businesses reduce procurement of raw materials and equipment. Vietnam is a key exporter of electronics, garments and textiles, footwear and wood items, including for top global brands.
Capital Economics on Thursday revised down its forecast for Vietnam’s GDP growth to 4.5 percent for this year, from 5.0 percent.
“With the external environment likely to remain unfavourable in the second half of the year, we expect the economy to struggle in the coming quarters,” Capital Economics said.
It added the central bank is likely to cut its policy rates further, by 100 basis points, by the end of this year, noting that inflation has eased.