Mongolia’s economy expected to grow 4.1pc in 2024 and 6.0pc in 2025
Mongolia’s economy had robust growth in 2023 as mineral output and exports increased, leading to current account and fiscal surpluses, as well as larger international reserves. Inflation receded but remained elevated. Mining will drive growth in 2024 and 2025, particularly the Oyu Tolgoi mine, which is expected to ramp up concentrate production.
In its flagship economic report, Asian Development Outlook (ADO) April 2024, the Asian Development Bank (ADB) projects that Mongolia’s economy will grow at 4.1 percent in 2024, compared to 7.0 percent growth in 2023. Growth in 2024 will be supported by mining and higher government spending, though the agriculture sector is expected to contract as Mongolia suffers from one of its worst winters in recent memory. The report also projects that gross domestic product growth in 2025 will climb to 6.0 percent, driven by an agriculture sector recovery, mining expansion, and services growth.
Sri Lanka’s inflation drops to 2.5 pc in March
Sri Lanka’s consumer price inflation dropped to 2.5 percent in March from 5.1 percent in February, official data showed on Monday, as the impact of a higher sales tax needed to meet targets set under a $2.9-billion IMF programme receded.
The National Consumer Price Index (NCPI) captures broad retail price inflation and is released with a lag of 21 days every month. The decrease was largely driven by a 22 percent cut in power tariffs last month for households, ensuring prices in the non-food category rose only 0.7 percent in March versus 5.1 percent in February.
Food prices stayed unchanged at 5 percent in March from February on the year, the Department of Census and Statistics said in a statement.”We are hoping that for the next three months inflation will remain below the target level of 5 percent,” said Shehan Cooray, head of research at Acuity Stockbrokers.
Sri Lanka racked up record high inflation that peaked at 70 percent in September 2022 after its economy was pummelled by the worst financial crisis in decades, triggered by a plunge in foreign exchange reserves.
China’s durian output to quadruple in 2024
China expects to quadruple home-grown durian output this year as demand for the pungent fruit has shown no signs of abating, while its two top suppliers – Thailand and Vietnam – are aiming to consolidate their market dominance and tap further into the burgeoning industrial chain.
Domestically grown durians were introduced last year from the tropical island of Hainan- the only Chinese province with a climate to nurture the tropical fruit – but typhoons have kept output to 50 tonnes (110,000 pounds). That would account for only about 0.005 percent of all the durian eaten in China last year.
Chinese-produced durians are likely to be available to the public in July, with production likely to reach 200 tonnes by the end of the year, Feng Xuejie, director of the Institute of Tropical Fruit Trees at the Hainan Academy of Agricultural Sciences, said on Monday.
Unemployment biggest worry in India
The biggest economic challenge for the government after the ongoing election is unemployment, according to economists polled by Reuters who expected the world’s most populous country to grow a healthy 6.5 percent this fiscal year. Despite growing at the fastest pace among major peers, the economy has failed to generate enough jobs for its large and expanding young population, a key issue among citizens in the midst of electing the next government. A majority of economists, 15 of 26, in the April 16-23 Reuters poll who answered an additional question said the biggest challenge for the government after the national election would be unemployment. Eight said rural consumption, two picked inflation and one said poverty. Following a decade of near jobless growth, the rising number of discouraged workers had pushed India’s LFPR (labour force participation rate) down well below levels exhibited by the four Asian tigers at comparable stages in their demography, said Kunal Kundu, India economist at Societe Generale.
Economists advocate high-tech shift for Bangladesh’s economy
Economists argue that Bangladesh remained ensnared in a low-wage economic cycle despite visible development, largely driven by labourers in various sectors like agriculture, RMG, and migration even as they emphasised the need for institutional reform and a shift towards high-technology-based production to ensure sustainable development and economic prosperity.
The observations were made at a recent book launch organised by the Centre for Policy Dialogue (CPD) even as they lamented the dysfunctional state of institutions, particularly in fiscal management.
Professor Rehman Sobhan, co-editor of the book, highlighted the absence of functional institutions critical for development and expressed concerns over the advanced deterioration in the banking system, identifying bank defaults as a serious structural crisis while Dr. Hossain Zillur Rahman emphasised Bangladesh’s entrapment in the economic trap of cheap labour, urging a focus on quality education to cultivate qualified human capital and combat corruption.
Indonesia-Singapore cooperation
During his working visit to Indonesia, Singaporean Foreign Minister Vivian Balakrishnan met with Coordinating Minister for Economic Affairs Airlangga Hartarto at the Office of the Coordinating Ministry for Economic Affairs on Tuesday. The meeting was in preparation for the Leaders’ Retreat between President Joko “Jokowi” Widodo and Singaporean Prime Minister Lee Hsien Loong at the Bogor Palace in West Java on April 29. Both ministers are optimistic that the economic relations between the two countries will continue to strengthen through a range of potential bilateral cooperation, including green energy, especially solar farms, carbon capture storage, development of Batam-Bintan-Karimun, digital connectivity and data centers.
India to surpass Japan
India’s nominal gross domestic product will likely outstrip Japan’s in 2025 to become the world’s fourth-largest economy, according to an International Monetary Fund estimate, a year earlier than the previous projection.
India’s GDP will likely total $4.3398 trillion in 2025, compared with Japan’s $4.3103 trillion, the IMF said in its latest estimate.
The IMF’s forecast in October had India surpassing Japan in 2026. In its April update, the IMF revised GDP forecasts for both countries slightly in local currency terms, but the depreciation of the Japanese yen looks to reduce Japan’s economy in dollar terms, hastening the country’s decline in the rankings.
Japan’s GDP was eclipsed by Germany in 2023. If it is overtaken by India, it will drop to fifth place.
The Indian rupee has largely remained flat against the dollar since the beginning of 2023 due to what appears to be intervention by the Reserve Bank of India. Currently it stands at about 83 rupees per dollar.
In its December 2023 report on India, the IMF noted that the authorities’ intervention in the currency market was likely beyond the level needed.
The Indian central bank countered that the IMF was making an erroneous analysis based solely on short-term exchange rate trends.
Shoring up structural reform for a resilient Malaysian Ringgit
In February 2024, the Malaysian Ringgit traded at almost RM4.8 against the US dollar, marking a trough not seen since January 1998 when the Asian Financial Crisis (AFC) swept through the region. Corporate governance reforms since the late 1990s have prevented Malaysia from suffering an equally severe fallout this time around.
Yet, it is of little comfort to average Malaysians who have seen their disposable income shrink as import costs have gone up. The government’s shift from blanket to targeted subsidies has created more financial stress on the population.
Newly appointed Second Finance Minister Amir Hamzah reassured parliament that the government is taking measures to address the situation. Most prominently, this includes measures encouraging government-linked companies and investment companies to repatriate foreign investment income back to Malaysia and to ration their overseas investments.
Such efforts to draw capital back home are laudable. If well executed, they are likely to restore confidence in an already jittery investment community. This initiative has sparked extra demand for the national currency, claimed Amir Hamzah on 19 March 2024, several weeks after the currency stabilisation and related measures were implemented. But the jury is still out as the Ringgit has only risen marginally against the US dollar since.
Nepal’s economy to gradually improve in fy2024
Nepal’s economy is anticipated to grow by 3.6 percent (at market prices) in fiscal year (FY) 2024, up from an estimated growth of 1.9 percent in FY2023, says the latest Asian Development Outlook (ADO) April 2024, a flagship publication of the Asian Development Bank (ADB).
“A gradual relaxation of monetary policy coupled with improved consumer and investor confidence is expected to stimulate economic activity in FY2024. Moreover, industry is projected to grow more rapidly than in FY2023 as capital spending by the government ramps up in the second half of the fiscal year, and as additional hydroelectricity power comes online by the end of FY2024,” said ADB Country Director for Nepal Arnaud Cauchois.
Service sector growth will also likely accelerate as credit controls ease, interest rates further decrease, and tourism revenues expand. Agriculture growth may increase marginally from 2.7 percent in FY2023 to 2.8 percent as a record rice harvest is tempered by a shortfall in winter crops and other agricultural production, given the deficient rainfall this winter season.
The report projects annual average inflation to fall to 6.5 percent in FY2024 from 7.7 percent in FY2023 on subdued oil prices and a decline in inflation in India, Nepal’s main import source.
External risks remain relatively well contained. The current account deficit may fall again into deficit after registering a surplus in the first half of FY2024. As the trade deficit contracted by 4.7 percent year-on-year in the first 6 months of FY2024, and as workers’ remittances expanded by 22.6 percent year-on-year, the current account recorded a surplus of $1.2 billion. However, amid higher imports and stable remittance inflows in the remainder of the fiscal year, the FY2024 current account deficit is forecast at 0.7 percent of gross domestic product.
Singapore’s economy misses forecasts with 2.7 pc growth
Singapore’s economy grew slower than expected in the first quarter, as a struggling manufacturing sector weighed on tourism spending from events including Taylor Swift’s concerts.
The city-state’s economic performance is often seen as a barometer of the global environment because of its reliance on international trade.
Gross domestic product (GDP) expanded 2.7 percent on-year, the Ministry of Trade and Industry said on Friday, faster than the previous three months but weaker than the 3.0 percent projected in a Bloomberg poll of economists.
It grew just 0.1 percent on-quarter.
The advance estimates are computed largely from data in January and February and are subject to revision when March figures come in.
Manufacturing, a pillar of the trade-reliant economy, rose 0.8 percent on-year and contracted 2.9 percent from October to December.
The services sector, which includes accommodation and food, grew 2.9 percent.
“In all likelihood, the slew of concerts which attracted many international visitors to Singapore’s shores, did have a temporal boost to the consumer-facing industries, namely the hospitality and entertainment-related activities,” said Selena Ling, chief economist at banking group OCBC.