Monetary policy to stay supportive
Thailand’s central bank said yesterday there was high uncertainty facing the economy and monetary policy would remain accommodative to support a recovery from the country’s most prolonged outbreak of the coronavirus. The Bank of Thailand (BoT) has forecast economic growth of 0.7 percent this year, bottoming out in the third quarter and growing 3.9 percent in 2022. The economy contracted 6.1 percent last year, with the key tourism sector still struggling. Thailand’s economic recovery may still lag others and “next year, our baseline is that the financial sector and monetary policy must remain supportive,” assistant governor PitiDisyatat told an analyst meeting.
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Indonesia C.Bank keeps rates at record lows
Indonesia’s central bank kept its policy rates steady at record lows on Tuesday, saying the decision was in line with the need to support the economic recovery while keeping the rupiah stable. Bank Indonesia (BI) held the benchmark 7-day reverse repurchase rate steady at 3.50 percent for the eighth straight month. All 29 analysts in a Reuters poll had expected rates to remain unchanged. Indonesia’s economy expanded at the fastest pace in 17 years in the second quarter of 2021, but the recovery was clouded by an outbreak in July – one of the worst resurgences of COVID-19 in Asia – that forced authorities to reimpose restrictions. While the domestic recovery was being buoyed by high exports and improving consumption after a recent easing of coronavirus curbs, the central bank stuck to its forecast for 3.5 percent to 4.3 percent growth this year.
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USD goes up as economy rebounds, imports rise in Bangladesh
The interbank exchange rate of dollars has risen to Tk85.65 from Tk84.8 in just two and a half months, according to Bangladesh Bank data, with per dollar value in the open market standing at Tk90. Bankers and economists say that the increase in post-Covid-19 business transactions, the opening of a large number of letters of credit (LCs) in the last few months, and payment of old dues are the main reasons behind the rising price of the greenback. Settlement of LCs ballooned by 45.3 percent year-on-year to $10.76 billion in July-August, according to central bank data. In these two months, LCs worth $12.13 billion were opened for importing various products— a 48.6 percent rise year-on-year rise.
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Brazilian economy likely to overtake South Korean economy
The South Korean economy, which joined the global top 10 in two years last year, is predicted to drop out of the list in three years by Brazil overtaking it. This has to do with the facts that South Korea’s working age population is decreasing, its industrial innovation is not enough, and participation in economic activities has declined there since the outbreak of COVID-19.
According to this month’s World Economic Outlook of the IMF, South Korea’s nominal GDP is estimated to increase 11.3 percent to US$1,908 billion this year and it is expected to remain on the top 10 list by surpassing Russia (US$1,648 billion), Brazil (US$1,646 billion), Australia (US$1,611 billion) and Spain (US$1,440 billion).
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Japan economic security minister warns on chip industry survival
Japan’s semiconductor industry is doomed to irrelevance unless the government matches the long-term strategic visions being laid out in the US and China, the country’s newly created minister for economic security has warned. Takayuki Kobayashi told the Financial Times that Japan had historically failed to identify the essential technologies that the country’s broad-based industrial economy should protect and promote to ensure it remained “indispensable” to the wider world. “The question is how we can establish areas where we excel so that the international community cannot survive without Japan,” Kobayashi said in his first interview with international media. His comments, which frame a growing dilemma for Japan in a world of increasing technology nationalism, were made just two weeks after Japan’s new prime minister Fumio Kishida created the role of economic security minister.
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Indian economy charges past prepandemic level
India’s economy is now doing better than before the start of the COVID-19 pandemic, an index compiled by Nomura Singapore shows, as the South Asian country overcomes a mass outbreak that brought its health care system to its knees earlier this year. But chip and energy shortages have begun to impact India’s manufacturing sector, casting shadows over the path to a full and lasting recovery. Farmer protests, once again picking up momentum after a coronavirus-induced lull, could also lead to widespread supply chain disruptions. The Nomura India Business Resumption Index has topped the prepandemic level of 100 — set in late February 2020 — for ten straight weeks since mid-August, reaching a new high of 108.8 in October. The index tracks such factors as movements of goods and people, the labor force participation rate, and electricity demand.
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China economy slows; officials say recovery ‘unstable and uneven’
China’s economy grew at the slowest pace in a year in the three months that ended in September, buffeted by power shortages, supply bottlenecks and sporadic outbreaks of COVID-19, increasing pressure on policymakers amid rising concern about the health of the property sector. Data released on Monday showed gross domestic product (GDP) grew 4.9 percent in the third quarter, compared with a year earlier, the slowest since the third quarter of 2020. The growth was also below economists’ expectations with a Reuters poll of analysts expecting GDP to rise 5.2 percent and a poll by the AFP news agency predicting growth at 5 percent.