ADB cuts Bangladesh’s GDP growth forecast to 6.2pc in fy24
Bangladesh’s economic growth is set to decelerate by 0.3 percentage points to 6.2percent in the current fiscal year as the economy slows and uncertainties over the January election prevail, says the ADB.
The Revised growth forecast from the Asian Development Bank came Tuesday in its flagship report Asian Development Outlook for December 2023.
In the last projection in September, the Manila-based lender had forecast that Bangladesh’s gross domestic product (GDP) would grow at 6.5percent.
The Growth has been revised down due to moderate growth in exports and manufacturing amid an economic slowdown in major export markets, power and energy shortages, and continued high inflation, the development financier said in the report published on Tuesday.
The giant ship of China’s economy will continue to cleave the waves
Since the beginning of this year, the China’s economy has been moving forward, overcoming obstacles and showing a sustained improvement amid a complex and challenging global environment characterized by a sluggish world economic recovery and persistently high global inflation.
Its economic growth rate has been significantly faster than that of major developed economies worldwide, showing a strong resilience and tremendous potential for economic development.
Where does the stability of the China’s economy lie? The figures speak for themselves.
In the first three quarters of this year, the year-on-year growth of the gross domestic product (GDP) was 5.2percent; the nationwide urban survey unemployment rate was 5.3percent, a year-on-year drop of 0.3percent; the scale of foreign exchange reserves remained stable at more than $3.1 trillion; and in the first 11 months, the national consumer price index rose by 0.3percent year-on-year.
Under the improving fundamentals, two features are particularly noteworthy: first, the internal driving force of economic development has been increasing.
IMF sees India economy grow at 6.3pc in current fiscal year
Indian economy is projected to grow at 6.3 percent in the current fiscal year and the next, the International Monetary Fund (IMF) said late Monday, supported by macroeconomic and financial stability.
The Country’s digital public infrastructure and a strong government infrastructure programme will continue to sustain growth, the IMF said in its Article IV consultation report, which reviews a country’s current and medium-term economic outlook.
“India has potential for even higher growth, with greater contributions from labour and human capital, if comprehensive reforms are implemented,” the IMF said.
The IMF’s growth projection for the current financial year, ending March 31, 2024, is lower than the 7pc forecast by the Reserve Bank of India (RBI).
“Headline inflation is expected to gradually decline to the target although it remains volatile due to food price shocks,” the IMF said.
How workforce training is helping Indonesia modernise its economy
Indonesia can realise its goal of becoming a high-income developed country by 2045, thanks to favourable demographics. To do so requires a national program capable of effectively harnessing Indonesia’s human capital and population characteristics, recognising that investments in human resources constitute an irreplaceable component.
Human capital is a critical national asset. Indonesia has 270 million people, 147.7 million of which are in the workforce. But whoever leads the country after next year’s presidential election must wisely unravel old policies and bravely continue the right programs rather than create new ones with similar objectives.
This will not be easy. Some 8 million individuals are unemployed in Indonesia and the national rate of Indonesians who are not participating in education, employment or training is notably high at 23.22 percent. Graduates from higher education and secondary school face higher unemployment rates than those with lower educational attainment, leading to widespread idleness. The low female workforce participation rate of just 54.52 percent further exacerbates the issue, falling far below the male workforce participation rate of 84.26 percent.
Japan’s central bank keeps its negative interest rate unchanged
The Bank of Japan kept its longstanding easy credit policy unchanged on Tuesday, saying it will watch price and wage trends before raising its negative benchmark interest rate.
The BOJ policy decision was widely expected. But investors and analysts believe the central bank is tip-toeing toward a shift due to price increases that have left inflation above its 2percent target.
The U.S. dollar gained against the Japanese yen and stock prices surged after Tuesday’s decision.
The Benchmark rate of negative 0.1percent is meant to encourage banks to lend more and businesses and consumers to borrow more to spur the economy, the world’s third-largest. The central bank also has purchased trillions of dollars worth of government bonds and other assets as part of its strategy of injecting more cash to spur growth as the Japanese population shrinks and grows older.
With 2024 budget, Malaysia gets serious about taxes
Malaysia is a resource-rich country with a smallish population of around 30 million. This means it produces more commodities (petroleum, palm oil, etc.) than it can consume, and exports the surplus. These exports generate revenue for the state through taxes and royalties, as well as through public ownership of the oil and gas company Petronas, which pays the government a yearly dividend.
But that is a risky fiscal model over the long term, as natural resources become depleted and the market price of export commodities is volatile and can rise and fall quickly. In recent years, for instance, the Malaysian government has seen big revenue windfalls thanks to sky-high commodity prices. The 2023 budget recycled some of this into infrastructure investment and energy subsidies. But they know they can’t count on that revenue every year.
In the 2024 budget, the first full-year budget since Anwar Ibrahim became prime minister, the message is clear: Malaysia is looking to pivot away from petroleum as a major source of state revenue. Instead, they want to develop a diversified tax base that can fund the government over the long term regardless of whether global commodity prices are high or low.
Govt of Mongolia approves plan to promote winter tourism
The Ministry of Environment and Tourism of Mongolia has developed a plan to promote winter tourism in Mongolia, increase the number of tourists, and implement projects based on local communities after the Mongolian government announced 2023-2025 as the “Years to Visit Mongolia”, Montsame reports.
The Cabinet members, governors of Ulaanbaatar and 21 provinces, along with heads of relevant public organizations, were directed to prioritize the implementation of activities outlined in the Plan from January 1 to May 1, 2024.
To attract more winter tourists, enhance tourism flow, mitigate seasonality, and foster the development of winter tourism, the Plan mandates that MIAT Mongolian Airlines maintains its discount ranging from 25-40 percent on the average flight prices.
Additionally, the Plan outlines collaborative efforts with tour operators to immediately plan winter trips. Hotels, tourist camps, resorts, and healthcare centers in Mongolia offer significant fee reductions of up to 50 percent during the winter season.
To coincide with public and winter holidays in Mongolia, a variety of leisure and travel opportunities will be made available. The tourism program consists of the development of border tourism routes alongside the organization of national and other sporting competitions and activities, including road trips, traditional ice-knuckle bone shooting and archery tournaments, as well as national festivals, such as “Mungulug Shagshuurga” (Silver Reeds) Winter Festival and “Blue Pearl” Ice Festival, the Eagle Festival, the Camel Festival and Camel Polo matches, the Reindeer Festival, and Tsagaan Sar.
Philippines maintains 6-7 pct gdp target for 2023
The Philippine government on Friday maintained its gross domestic product (GDP) target at 6 to 7 percent for 2023, while it narrowed the 2024 growth target to 6.5 to 7.5 percent from the previous range of 6.5 to 8 percent.
With robust domestic demand and broad-based expansion in major sectors, the Philippine economy grew by 5.5 percent in the first three quarters of this year, sustaining its position as one of the best-performing economies in the Asia-Pacific Region, said the Development Budget Coordination Committee (DBCC) in a statement.
“This growth momentum is expected to continue for the rest of the year and surpass that of our neighboring countries,” the DBCC added.
The Interagency economic team retained the 6.5 to 8 percent GDP growth assumption for 2025 to 2028, and believed this year’s corresponding GDP per capita would be above pre-pandemic levels.
The DBCC also pegged the average inflation rate at 6 percent this year. The inflation rate is expected to return to the target range of 2 to 4 percent from 2024 until 2028.
The Philippine economy expanded by 7.6 percent in 2022, as one of the fastest economies in the Asia Pacific region. In 2021, the country’s GDP grew by 5.7 percent after contracting 9.6 percent in 2020 due to the pandemic.
In its latest report, the Asian Development Bank forecast the Philippines’ GDP in 2023 at 5.7 percent and 6.2 percent in 2024. The multilateral lender forecast inflation to hit 6.2 percent this year and 4 percent in 2024.
Political risks loom over Sri Lanka’s economic stabilisation
Sri Lanka’s economy showed signs of stabilisation in 2023 after the worst economic and political crisis since its independence in 1948. An acute balance of payments crisis caused lower- and middle-income Sri Lankans to pre-emptively default on foreign debt, which exceeded US$50 billion in April 2022. A crippling economic contraction, spiralling inflation, shortages of food and fuel and financial uncertainty followed.
The Remarkable change during 2023 can be traced to decisive policies by President Ranil Wickremasinghe’s new government, formed in July 2022, after mass protests forced then president Gotabaya Rajapaksa to resign.
The Wickremasinghe government implemented stabilisation measures — namely hiking interest rates to control inflation, removing fuel subsidies, raising taxes and passing a law to improve the independence and accountability of the Central Bank of Sri Lanka. The government also conducted external debt restructuring talks with creditors, intensified discussions with the International Monetary Fund (IMF) on an economic bailout, sought Indian aid and engaged in free trade agreement-led Asian regionalism.
These Efforts made a difference. The Sri Lankan economy is stabilising despite major challenges that remain. Inflation fell from a peak of 70 percent in September 2022 to 3.4 percent in November 2023. Foreign exchange liquidity pressures eased, with usable foreign reserves rising from only US$20 million in April 2022 to US$2 billion in October 2023. Waiting lines for essential goods have disappeared.
In March 2023, the IMF Board approved a tough Extended Fund Facility worth US$2.9 billion over 48 months, which emphasises revenue-based fiscal consolidation and governance reforms. The first review by the IMF Board on 12 December 2023 rated ‘Sri Lanka’s performance as satisfactory’ meaning that total IMF disbursement will be US$670 million (22 percent) in 2023. The IMF facility unlocked additional funding from the World Bank and the Asian Development Bank for social protection, financial sector development and infrastructure development.