Tokyo: wars slows economy, delays recovery
Japan’s economy is also beginning to feel the effects of the hardships caused by the Russian invasion of Ukraine. Recovery after the sharp contraction of 2020 is therefore further delayed due to the uncertainties of the international context, but other factors are also weighing heavily.
The first sign of concern came last week, when the International Monetary Fund published its own report in which expected growth for the current year was downgraded from 3.3 percent to 2.4 percent. The document went on to indicate that consumption would drive the recovery but also pointed out that the outlook had worsened with the war: “the escalation of the conflict in Ukraine poses significant downside risks to the Japanese economy,” the report said.
Indeed, the European war poses a problem for Japan’s economy on multiple fronts. The first factor is certainly that of supply chains, which due to sanctions and geopolitical tensions will be forced into a phase of readjustment. But the most important issue is certainly the import of energy and raw materials, which for a country lacking in natural resources such as Japan represents a major problem.
Despite lofty goals, China’s leaders sound anxious about economy
When Chinese Premier Li Keqiang called for a “sense of urgency” about growing economic risks during a meeting with provincial officials earlier this week, it was his third such warning in days.
“We need to be highly vigilant for unexpected changes in the international and domestic situations, and downward economic pressure has further mounted,” China’s No 2 official told a symposium in Jiangxi province on Monday, according to a report in South China Morning Post, less than a week after drawing attention to the “complicated and evolving” global situation and COVID-19 outbreaks at home.
As China’s draconian “dynamic zero-COVID” pandemic restrictions and uncertainties including the war in Ukraine weigh on growth, Beijing appears increasingly concerned about the prospects for the world’s second-largest economy.
The uncertain outlook casts doubt on the ruling Chinese Communist Party’s ability to reach its target of 5.5 percent economic growth in 2022, even as state media insist the ambitious goal remains within reach, adding to mounting risks for the global economy that include war in Europe, soaring energy prices and upcoming interest rate increases in the United States.
| GDP in USD Billion | |||
|---|---|---|---|
| Country | Last | Previous | Reference |
| China | 14723 | 14280 | 20-December |
| Japan | 4975 | 5149 | 20-December |
| India | 2623 | 2870 | 20-December |
| South Korea | 1631 | 1647 | 20-December |
| Indonesia | 1058 | 1119 | 20-December |
| Thailand | 502 | 544 | 20-December |
| Philippines | 361 | 377 | 20-December |
| Singapore | 340 | 374 | 20-December |
| Malaysia | 337 | 365 | 20-December |
| Bangladesh | 324 | 303 | 20-December |
| Vietnam | 271 | 262 | 20-December |
| Pakistan | 264 | 278 | 20-December |
| Sri Lanka | 80.71 | 83.98 | 20-December |
| Nepal | 33.66 | 34.19 | 20-December |
| Maldives | 4.03 | 5.64 | 20-December |
Economic catastrophe in Sri Lanka and the message it sends to Bangladesh and S. Asia
The South Asian country Sri Lanka is now facing the most economic crisis in its 74-years history. But some days ago, Sri Lanka was the most advanced economy in South Asia, with a per capita GDP of over 4 thousand USD. 95 percent of Sri Lankans are educated, their education system is the most effective of all South Asian countries. Their healthcare system is also the best in South Asia, after Kerala, India. Sri Lanka was also a major tourist destination in South Asia. But over the years, Sri Lanka’s economy has been in deep crisis. The growing shortage of imported goods in the country is ruining the lives of the people. The country has been going through a terrible food crisis for several months. With foreign exchange reserves at an all-time low, it is safe to say that they cannot meet the crisis by importing food from abroad. The growing shortage of essential commodities has brought about an unprecedented catastrophe in public life. The foreign exchange rate of the Sri Lankan rupee was 190 rupees to the dollar a few days ago, but in the last two months, it has risen to more than 300 rupees. At present, the country’s foreign exchange reserves are fluctuating between 1 billion to 2 billion, while Sri Lanka will have to repay 7.3 billion in interest within the next year. This means that Sri Lanka is on the verge of becoming ‘financially bankrupt’. The Sri Lankan government has recently declared a state of emergency in the country, as the country faces a mass uprising to oust the Rajapaksa family. As many may not know, the current Sri Lankan government has five members from the Rajapaksa family the president, the prime minister, and three other ministers. The Rajapaksa family controls about 75 percent of Sri Lanka’s government budget.
For Indonesia’s tech star goto, success a long time in the making
When Indonesian e-commerce startup GoTo debuted on the stock market this week, Christopher Panal Lumban Gaol, a lecturer in business law at Santo Thomas Catholic University in Medan, felt a swell of pride.
“In the business world, Indonesia is known for being a consumptive country and not a productive one,” Gaol told Al Jazeera.
“So there was perhaps a sense of euphoria when GoTo started trading. We don’t make our own products like cars, so online apps are something Indonesians can be proud of because we have a number of good models.”
While GoTo seemed to defy expectations by launching a successful initial public offering (IPO) as tech stocks take a hammering globally – even beating its own valuation of $26.2bn-$28.8bn – the startup’s strong showing did not come as a surprise to market watchers in its home country.
Malaysia needs Chinese tourists to lift economy
Chinese tourists are the booster shot for Malaysia’s tourism-related industries, and without their return in big numbers, the recovery of such industries would be impacted.
With the lockdowns in China amid its “zero-Covid policy”, there are concerns that fewer Chinese nationals will visit Malaysia this year despite the reopening of borders.
Socio-Economic Research Centre (SERC) executive director Lee Heng Guie noted that about 11.9 percent of international tourists to Malaysia in 2019 were from China.
“If tourists from China are not coming back in a big way, I believe the anticipated rebound in tourism-related industries will be somewhat smaller than pre-pandemic levels.
“This is something that we have to monitor, any big shock in China will impact the global and regional economies, including Malaysia,” he said during SERC’s virtual quarterly economic tracker briefing yesterday.
Lee also said the supply chain disruption within the global semiconductor sector, including in Malaysia, may take a longer time than expected to ease.
“By right, the supply chain would likely ease off by the first or second half of this year, but with the Russia-Ukraine conflict, that could further lengthen the supply chain disruption for components and parts in the semiconductor industry,” he added.
Maldives’ economy expected to grow rapidly: ADB
The Asian Development Bank (ADB) has said the Maldives’ economy is expected to become the fastest-growing economy in Asia.
The Asian Development Outlooks (ADO) report published annually by ADB states that the Maldives economy is expected to grow most rapidly among the developing countries of Asia and the Pacific. According to ADB, the increase in the growth trajectory is due to the revival of tourism, accelerating economic growth.
The report stated that the Russian invasion of Ukraine had created uncertainty over the economic prospects of countries that are important for the Maldives’ tourism industry. Although tourist arrivals from Russia are expected to fall sharply due to sanctions against the country, the Maldives’ economy is expected to grow due to the recovery of the construction sector, said ADB.
India’s GDP expected to grow 9 pc in fy22
India’s gross domestic product (GDP) is expected to have grown 9.0 percent in the financial year 2021-22, which is the highest among the leading economies, and the growth is likely to be over 8.0 percent in the current financial year, according to the PHD Chamber of Commerce and Industry. “India’s growth trajectory is expected to remain steady in 2022-23, supported by various dynamic reforms undertaken by the government during the past two years,” Pradeep Multani, president of PHD Chamber of Commerce and Industry, said in a statement on Monday.
He added that among the major worrying factors in 2022-23 are geopolitical conflicts, high inflation and renewed coronavirus variants. “At this juncture, the percolation of ease of doing business at the factory level would go a long way to enhance the size of the economy to USD 5 trillion by 2026-27.”
Industry body PHDCCI in its report, titled ‘Economy to Resume Normal Growth Curve in 2022-23’, envisaged that the nominal GDP will grow at 12-12.5 percent (8 percent real GDP and 4-4.5 percent inflation) in the current financial year and the economy will attain a size of USD 3,350-3,400 billion in 2022-23.”
Singapore economy grows 3.4 pc in Q1
Singapore’s economy grew 3.4 percent year-on-year in the first quarter of 2022, according to advance estimates released by the Ministry of Trade and Industry (MTI) on Thursday (Apr 14).
This marked a slower pace than the previous quarter when the economy expanded 6.1 percent. Economists polled by Reuters had expected growth of 3.8 percent.
On a quarter-on-quarter seasonally adjusted basis, Singapore’s gross domestic product (GDP) grew 0.4 percent in the first quarter, slower than the 2.3 percent in the preceding quarter.
The advance GDP estimates are computed largely from data gathered in the first two months of the quarter.
“They are intended as an early indication of GDP growth in the quarter and are subject to revision when more comprehensive data become available,” said MTI.
The advance estimates indicated that Singapore’s growth still “remained firmly in positive territory” despite headwinds from the Omicron variant, said Mr Alex Holmes, an emerging Asia economist at research firm Capital Economics.
COVID-19 caseloads surged at the start of the year due to the Omicron variant. With numbers falling last month, Singapore eased many of its safe management measures.