Japan’s economy likely to grow more slowly than expected
Japan’s economy is likely to grow at a slower pace than previously thought throughout the rest of the fiscal year, a Reuters poll showed, as growing risks of a global economic slowdown and supply woes torment Japanese exporters. Manufacturers in the world’s third-largest economy are susceptible to the gloomier growth outlook in major trading partners such as the United States and China that are stoking recession and stagflation fears worldwide. Analysts, however, still projected Japan’s growth to stay positive throughout the fiscal year until next March, the poll showed, thanks to an expected recovery of consumption, which accounts for over half of the country’s gross domestic product. The economy was projected to expand an annualised 3.1 percent this quarter, the median forecast of 36 economists in the July 4-15 poll showed, lower than 3.5 percent estimated in a June survey. Economists in the poll downgraded growth estimates for the October-December and January-March quarters slightly as well, while cutting those for last quarter even sharper, to 3.2 percent from June’s 4.1 percent.
| Japan Exports By Country (JPY Million) (May 2022) | ||
|---|---|---|
| Details | Last | Previous |
| China | 1389710 | 1489068 |
| United States | 1254677 | 1500360 |
| European Union | 682406 | 805321 |
| South Korea | 552776 | 599383 |
| Taiwan | 542882 | 605105 |
| Hong Kong | 370215 | 376000 |
| Thailand | 322469 | 366134 |
| Singapore | 223656 | 265511 |
| Germany | 183404 | 206742 |
| Malaysia | 172286 | 178535 |
| Indonesia | 150993 | 148018 |
| India | 142044 | 145359 |
| Australia | 135864 | 168295 |
| Philippines | 131974 | 126029 |
| Netherlands | 109797 | 131453 |
| United Kingdom | 88744 | 114609 |
| Belgium | 67306 | 78069 |
| France | 60260 | 72907 |
| Italy | 56709 | 61980 |
Sri Lanka crisis is a warning to other Asian nations
Sri Lanka is in the midst of a deep and unprecedented economic crisis that has sparked huge protests and seen its president quit after fleeing the country – but other countries could be at risk of similar troubles, according to the head of the International Monetary Fund (IMF). “Countries with high debt levels and limited policy space will face additional strains. Look no further than Sri Lanka as a warning sign,” said IMF Managing Director Kristalina Georgieva on Saturday. She said developing nations had also been experiencing sustained capital outflows for four months in a row, putting their dreams of catching up with advanced economies at risk. Sri Lanka is struggling to pay for crucial imports like food, fuel and medicine for its 22 million people as it battles a foreign exchange crisis. Inflation has soared about 50 percent, with food prices 80 percent higher than a year ago. The Sri Lankan rupee has slumped in value against the US dollar and other major global currencies this year. Many blame ex-President Gotabaya Rajapaksa for mishandling the economy with disastrous policies whose impact was only exacerbated by the pandemic.
Tourists stuck in China resort city after covid lockdown
More than 2,000 tourists have been stranded in a Chinese coastal city after a surge in coronavirus cases. Officials in Beihai locked down urban areas and ordered the mass testing of its 1.9m residents over the weekend. It comes as concerns grow about the impact of China’s “zero-Covid” policy on the world’s second largest economy. Last week, official figures showed the country’s economy shrank in the second quarter of this year as Covid-19 restrictions hit firms and consumers. Beihai, which is a popular summer destination in China’s southern Guangxi region, recorded more than 450 infections in the five days to 16 July. While that level of cases may seem low by international standards it is considered high under the Chinese government’s approach to the pandemic.
India set on course to become world’s fastest-growing economy, says RBI
India’s economy has remained resilient in the face of global headwinds and with inflation coming off its recent peak is expected to stay on course to become the world’s fastest-growing economy, the Reserve Bank of India said on Saturday. The recent revival of the southwest monsoon and renewed planting raised expectations that rural demand will soon catch up with urban spending and consolidate a recovery, the RBI said in a bulletin. “Knock-on effects of geopolitical spillovers are visible in several sectors, tapering the pace of recovery,” the central bank said. “In spite of this overwhelming shock, there are sparks in the wind that ignite the innate strength of the economy and set it on course to becoming the fastest growing economy in the world, though besieged it might be by fears of recession.” It did not give a time frame. RBI said if the commodity price moderation witnessed in recent weeks endures alongside the easing of supply chain pressures, the worst of the recent surge in inflation will be over. India’s annual consumer inflation remained painfully above the 7 percent mark and beyond the central bank’s tolerance band for the sixth month in a row, data last week showed.
G20 Women’s forum accused of excluding indigenous Indonesians
Indigenous and women’s rights groups in Indonesia are protesting against the G20’s headline event for gender equality over the alleged exclusion of local voices and failure to address key women’s issues in North Sumatra. Activists gathered at the site of the W20 Summit in Lake Toba, North Sumatra on Wednesday to call attention to deforestation and other issues they say have been neglected by the event taking place from 19-21 July. “I think the W20 narrative is ironic when their theme is ‘recover together’ equally, but they didn’t even include any agenda related to the challenges of the women of Lake Toba, especially regarding land grabbing and customary forests,” Sekar Banjaran Aji, a campaigner for Greenpeace Indonesia, told Al Jazeera. “Toba women are not involved in the talks in an inclusive manner, so how can they recover together equally? The forum focused on small and medium enterprises (SMEs), while women are dying trying to defend their customary land, something which is apparently not considered a problem for the W20.” The W20, which stands for Women 20, is the G20’s official dialogue for women’s empowerment and one of several engagement groups under the umbrella of the economic forum.
Malaysia’s economy stronger than Sri Lanka
Malaysia’s economy is far stronger than Sri Lanka’s if the two countries’ economic indicators are being compared and the possibility for this country to go bankrupt like Sri Lanka is remote, Minister of Finance Datuk Seri Tengku Zafrul Abdul Aziz said. He said the International Monetary Fund (IMF) has never stated that Malaysia is experiencing economic problems that have resulted in the country going bankrupt, instead, the international body is confident in Malaysia’s economic growth prospects. “In April this year, the IMF has expressed confidence that the country’s gross domestic product (GDP) for 2022 will grow at a rate of 5.75 percent,” he said during the Minister’s Question Time session at the Dewan Rakyat. He was responding to Datuk Seri Ahmad Maslan’s (BN-Pontian) query on whether Malaysia’s debt level was still manageable and whether the country could suffer the same fate as Sri Lanka. “Nevertheless, the government must continue to manage the country’s finances prudently and control the level of debt in terms of affordability,” he added. — Bernama
Could Nepal go the Sri Lanka way?
There is growing speculation that the Nepali economy will disintegrate like in Sri Lanka as the country’s foreign exchange reserves have shrunk and inflation has soared with rising fuel prices. For the first time since the 2000s, foreign exchange reserves have dropped to around $9 billion, which is barely enough to fund imports for six months, down from 11 months. At the same time, inflation has hit an alltime high of 8.56 percent with the employment rate remaining as disappointing as usual. Therefore, there is no reason to disregard the suspicions outright. Before delving into this phenomenon, it is relevant to understand how Sri Lanka landed in its worst economic disaster ever. Facts and figures made available by the World Economic Forum show that, like Nepal, Sri Lanka depends excessively on a handful of export products such as tea, rubber, and readymade garments. Earnings from tourism and remittances contribute substantially towards the net income of foreign currency. But because the product base for exports is narrow and earnings from tourism and remittances often remain stagnant, the country frequently encounters balance of payments crises which strain its foreign exchange reserves.
Singapore growth to moderate further next year
Singapore’s economic growth is expected to moderate further next year, tracking a slowdown in its major trading partners, while global inflation is expected to ease in 2023, the head of the city-state’s central bank said on Tuesday. “We are seeing a surge in inflation globally because a robust demand recovery post-COVID has run into supply-side frictions and, more recently, war-related disruptions,” said Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS). “Rising inflation has no doubt dented business and consumer confidence, but not yet to a degree that would lead to a severe downturn this year,” Menon told a news conference after the MAS published its annual report. Last week, Singapore tightened its monetary policy in an off-cycle move that came just after Canada’s surprise 100 basis point interest rate hike and before an out-of-cycle rate hike in the Philippines. “Taming inflation is like trying to slow down a speeding car on a gentle slope. It takes a combination of forcefulness and calibration,” Menon said.
Sri Lanka’s economic crisis a warning to other countries with high debt: IMF chief
International Monetary Fund (IMF) chief Kristalina Georgieva has cited the example of the unprecedented economic crisis in Sri Lanka to warn other countries that they could also face a similar situation in the face of high debt levels and limited policy space. “I wish the global economic outlook was as bright as the sky in Bali, but unfortunately, it is not. The outlook has darkened significantly, and uncertainty is exceptionally high. Downside risks about which the IMF had previously warned have now materialised,” International Monetary Fund Managing Director Kristalina Georgieva said at the meeting of G20 Finance Ministers and Central Bank Governors in Indonesia. “Countries with high debt levels and limited policy space will face additional strains. Look no further than Sri Lanka as a warning sign,” Ms Georgieva said on Saturday. The comments from the IMF MD came as Sri Lanka is going through its toughest economic crisis and is in a hard position where it cannot pay for its essential imports, fuel, food and medicine due to an acute forex crisis.