Japan watching impact of rate rises by the west on its economy
Japan will watch how rising interest rates in Western nations could affect its economy, the finance minister said on Tuesday, as higher bond yields would boost borrowing costs for the industrial world’s heaviest public debt burden.
Shunichi Suzuki made the remark as the parliament’s powerful lower house is set to approve the fiscal 2022/23 budget with a record $940 billion in spending on Tuesday, setting the stage for the budget’s full passage through the legislature in March.
“As interest rates rise, interest payments will rise as well, straining Japan’s budget,” Suzuki told reporters after a cabinet meeting.
“If trust in our fiscal management is called into question, we cannot rule out a possibility that it could have a big impact on policy implementation and people’s livelihoods.”
Japanese government bond (JGB) yields were recently at multi-year highs, partly driven by bets that the Bank of Japan (BOJ) may have to scale back monetary stimulus in response to the tightening campaigns of global central banks. The yields have since retreated somewhat as Ukraine tensions send investors seeking safe-haven assets.
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China plans bigger tax, fee cuts in 2022
China will unveil bigger tax and fee cuts this year and step up payments to local governments to offset their hit to revenues, Finance Minister Liu Kun said on Tuesday, amid efforts to support a slowing economy.
Tax fee cuts will be larger in 2022 than last year’s 1.1 trillion yuan (US$173.68 billion) in reductions, Liu told a news conference without specifying the size of the planned cuts.
“This year, the central government will significantly increase the size of transfer payments, especially general transfer payments, and continue to favour regions with difficulties and underdeveloped areas,” Liu said.
Planned transfer payments to local governments will help largely offset the impact from tax and fee cuts on local governments’ revenues, he said, adding that such transfer payments topped 8 trillion yuan in 2021.
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Indian economy growing at 9.2pc
The Indian economy is growing at 9.2 percent and is expected to grow at similar rates in the coming years, Niti Aayog CEO Amitabh Kant said on Monday.
While referring to the government’s production linked incentive (PLI) scheme for sunrise sectors, Kant said it will add USD 520 billion to India’s output in the next five years and make India a part of the global supply chain.
“Today India is witnessing unprecedented levels of economic development and technological disruptions. The economy is growing at 9.2 percent and is expected to grow at similar rates in the coming years, making us one of the fastest-growing large economies in the world,” Kant said at an AIMA event.
The country has taken several measures to maximise efficiency and several reforms have been taken by the government in that direction such as GST, Insolvency & Bankruptcy Code, lowering of corporate taxes, etc, he noted.
This will help make India a global manufacturing champion and manufacturing hub, Kant added.
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Malaysian economy on track
THE Malaysian economy appears to be on track to achieve above trend growth this year assuming that the Covid-19 can be contained and there is freer human mobility, hence, the GDP growth expected to be more than 5 percent in 2022.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid foresees GDP in 2022 to reach 5.5 percent.
“As for exports and imports for the whole year, the trend will continue to be favourable, but given the high base factor last year especially beginning February 2021, growth should start to normalise commencing next month.
“For 2022, we are projecting total exports and imports to grow by 10 percent and 12 percent respectively,” he told The Malaysian Reserve.
Malaysia’s trade in January 2022 continued to be resilient, expanding 24.8 percent to RM203.05 billion compared to that of January 2021, the Ministry of International Trade and Industry (MITI) said.
According to MITI, exports accelerated 23.5 percent to RM110.73 billion in January 2022, the sixth successive month of double-digit expansion since August 2021, while imports increased 26.4 percent to RM92.32 billion and trade surplus grew 10.9 percent to RM18.4 billion.
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Bangladesh GDP grows at 6.91 pc
The Bangladesh economy registered an impressive 6.91 percent growth in the financial year 2020-21 exceeding the provisional estimate by 1.51 percent, according to the Bangladesh Bureau of Statistics (BSS). The GDP growth rate in 2019-20 was 3.45 percent.
The accelerated growth rate has taken place on the back of the rebound in the industrial sector, especially the cottage, small, medium and large industries. The information was shared at the meeting of the Executive Committee of the National Economic Council (ECNEC) chaired by Prime Minister Sheikh Hasina on Tuesday. The industrial sector showed a sharp rise in growth rate from 3.61 percent in FY 2019-20 to 10.29 percent in FY 2020-21.
Within the industrial sector, micro, small and medium industries grew at 13.89 percent in FY 2021 from 6.03 a year earlier. Agriculture grew at 3.17 percent, showing a decline from 3.42 percent in 2019-20. The Services sector showed an increase from 3.93 percent in 2019-20 to 5.73 percent in 2020-21. The size of Bangladesh GDP stood at $416 billion compared to $411 billion in the primary estimate.
The per capita income of Bangladesh now stands at $2,591, rising from the previously estimated $2,554. The GDP growth figures are higher than those estimated by international organisations. The IMF had estimated the growth rate to be 4.6 percent and the Asian Development Bank (ADB) at 5.5 percent for the FY 2020-21. The World Bank had estimated Bangladesh growth rate for 2020-21 to be 5 percent. Planning Minister M A Mannan called it a miracle amid the pandemic while most other countries suffered a reduction in GDP.