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Monday, 6 February 2012 | Greece Forces Overtime in Critical Debt Talks
Greece has insisted on extending critical talks on a debt rescue into Monday, as the government's coalition backers denounced pressure from public creditors to pass harsher austerity measures. After a five-hour meeting with his socialist, conservative and far-right allies, Prime Minister Prime Minister Lucas Papademos said the talks would continue on Monday, and that agreement had been reached on many issues. But George Karatzaferis, leader of far-right party LAOS and Antonis Samaras, head of the conservative New Democracy party both attacked what they said was pressure to impose even harsher cuts on the Greek people. Athens has been in talks with the European Union, the International Monetary Fund and the European Central Bank on further action needed to unlock a new eurozone rescue deal worth 130 billion euros pending since October. |
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Friday, 3 February 2012 | Indonesia’s Domestic Strength Counters European Debt Turmoil
Indonesia’s growth probably exceeded 6 per cent for a fifth quarter as domestic demand helped Southeast Asia’s largest economy withstand the European debt turmoil that hurt exports across Asia. GDP increased 6.45 per cent in the fourth quarter from a year earlier, according to median estimates in a Bloomberg News survey. Bank Indonesia is also expected to keep its benchmark rate at a record-low 6 per cent. Two rate cuts in the last quarter aided President Susilo Bambang Yudhoyono’s efforts to increase GDP by an average 6.6 per cent a year. The country regained investment-grade rating from Moody’s Investors Service and Fitch Ratings for the first time since the Asian financial crisis in recent weeks, boosting investment prospects as it plans transport and utility projects. Indonesia’s policymakers have also signalled they are prepared to support the economy with monetary and fiscal stimulus as Europe’s protracted sovereign-debt crisis threatens global expansion and crimps demand for Asian exports. |
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Thursday, 2 February 2012 | V-shaped Recovery Planned for Thailand
Thailand's economy will grow roughly five percent in 2012, rebounding from the impact of months of devastating floods last year, Prime Minister Yingluck Shinawatra said. She said Thailand aimed to reduce its dependence on the United States and Europe as export destinations, in favour of emerging markets such as the Middle East, India and the rest of Southeast Asia. "I believe that the government's economic policy will bring about a V-shape recovery, and we will see better signs from the second quarter." Many factories in Thailand's industrial heartland have been closed for months because of the damage caused by last year's floods. Thailand's central bank in January cut its benchmark interest rate for the second time in three months, to 3%, in a bid to stimulate the weakened economy. Inflation slowed to an annual rate of 3.38% in January, from 3.53% in December. |
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Wednesday, 1 February 2012 | Indonesian Economy to be Star Performer in Asia
The Indonesian economy is set to be a bright spot in Asia this year. Economists have forecast growth to be between 5.8 to 6.3%, after having taken external risks and the worsening external environment into account. The main external risks are the ailing economies of the eurozone and the US and the potential for exports to China declining because of weakening commodity prices. The impact is expected to be mitigated by its domestic base of 240 million consumers and its young population. Furthermore, the economy has strong fundamentals and is under-leveraged. The role of the banking sector could be pretty influential in driving consumer spending in the next five to 10 years compared to the US and Europe, where the household and public sectors are overleveraged. A key factor contributing to Indonesia's upward consumption pattern is its strong resource base. Indonesia is the world's largest exporter of thermal coal, tin and palm oil, and a leading exporter of coffee, cocoa and rubber. |
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Tuesday, 31 January 2012 | IMF Plays Down Risk of China "hard landing"
An International Monetary Fund official said that China was taking steps to reduce property bubble risks and said it has room to add fiscal stimulus if conditions worsen. "China can move away from its reliance on external demand and needs to build up domestic demand," said Anoop Singh, the IMF director for Asia and the Pacific at a news conference. He said Beijing was working on measures to stimulate demand. "We don't see (a) hard-landing risk as likely," Singh added, noting property prices were moderating and sales volumes declining. "Our sense is that these risks are being addressed and our prediction is clear: that growth will remain above 8 percent at the baseline and that if there were to be greater risks externally China has sufficient fiscal space to respond." |
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Monday, 30 January 2012 | US Economy Picks Up Steam, But Growth Unsustainable
The U.S. economy grew at an annual rate of 2.8% in the fourth quarter, its fastest pace in 18 months. That was the first time that growth exceeded 2% all year and the fastest pace since the second quarter of 2010. For the full year, growth was 1.7%, below the 3% pace that many economists say is needed to quickly bring down the unemployment rate. Most of the growth was attributed to a surge in inventory replenishing by businesses, and by consumers boosting their spending at the end of 2011 in part by drawing down savings. Both trends are not likely to last, and the underlying weak demand pointed to slower growth in coming months. The silver linings among the dark clouds were the rise in disposable income for the first time since early 2011, and consumers’ respite with milder price increases due to lower energy costs. The tame inflation could make it easier for the Federal Reserve to act to boost the economy without risking runaway inflation. |
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Friday, 27 January 2012 | ADB Chief: Asia to Power World Economy in 2012
The head of the Asian Development Bank, Haruhiko Kuroda, said that the global economic slowdown will affect Asia this year but the region will remain the economic powerhouse of the world, led by China, India and Indonesia. The ADB expects Asian economies, excluding Japan, Australia and New Zealand, to grow by around 7 per cent this year, down from about 7.5 per cent in 2011 and 9 per cent in 2010, citing "fairly robust" regional and domestic demand, even though external demand is lower. He said Asia has already been affected by the ongoing European financial crisis in two ways, through the withdrawal of credit in Asia by many European banks and financial institutions and a drop in trade, which will impact China because Europe is its largest export market, and expressed hope that the European crisis can be overcome. Nonetheless, Kuroda predicted that China will continue to lead Asia's growth in 2012, expanding its economy by more than 8 per cent, followed by India at between 7-8 per cent and Indonesia at around 6.5 per cent. |
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Thursday, 26 January 2012 | Fed Extends Low Rates Forecast to 2014
The US Federal Reserve predicted that interest rates will stay on hold at least through late 2014 in a dramatic extension to the period for which it expects to keep rates low. The Fed’s previous forecast was of rates on hold until mid-2013. The statement acted as a significant easing in monetary policy by moving out market expectations of the first rise in interest rates and led to an immediate fall in bond yields. The Fed also took the historic step of adopting an explicit inflation target, though Bernanke took pains to stress that officials would be flexible about reining in price growth when unemployment was too high. The late 2014 timeframe for the first rate hike was considerably later than investors had expected and some 18 months later than the Fed had suggested last year, and the announcement prompted a rally in U.S. government bonds. |
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