China’s economy could be dragged down
The loss of confidence in China’s property sector could feed into a contagion that would further drag down the Chinese economy, analysts warned.
The comments come after beleaguered developer China Evergrande Group failed to deliver a promised $300 billion restructuring plan over the weekend.
In filings with the Hong Kong stock exchange, Evergrande instead said it had “preliminary principles″ in place for the restructuring of its offshore debts. It also said one of its subsidiaries, Evergrande Group (Nanchang), had been ordered to pay an unnamed guarantor 7.3 billion yuan ($1.08 billion) for failing to honor its debt obligations.
“For the government, the priority is to break the negative feedback loop that features the high leverage ratio and the liquidity crunch on the part of the developers,” Shuang Ding, Standard Chartered chief economist for Greater China and North Asia, told CNBC’s “Street Signs Asia.”
“That leads to a mortgage boycott and very low appetite on the part of the homebuyer, and that goes back to the developer because low sales affect its liquidity.”
Bangladesh’s garment sector faces energy, demand crises
Bangladesh’s garment industry, the world’s No. 2 exporter after China, is facing a double whammy from slowing global demand and an energy crisis at home that’s threatening to thwart the nation’s pandemic recovery.
Plummy Fashions Ltd., a supplier to PVH Corp., the parent company of fashion brand Tommy Hilfiger, and Inditex SA’s Zara, saw new orders in July drop 20 percent from a year earlier, its Managing Director Fazlul Hoque said.
“Retailers in both European and US markets are either deferring the shipments of finished products or delaying orders, he said in an interview. “As inflation is soaring in our export destinations, it has a serious impact on us.”
Waning orders are a risk to the economy, where the garment industry makes up more than 10 percent of gross domestic product and employs 4.4 million people. It couldn’t be happening at a worse time for Bangladesh as authorities are resorting to productivity-killing power cuts to preserve fuel reserves amid a region-wide energy crisis, caused in part by the war in Ukraine.
“Uninterrupted energy supply is the key to delivering products in time,” Hoque said. “We’re facing a combination of multiple problems at home and abroad.
“The cost of electricity from generators is three times what we get from the national grid because diesel is costly,” Atiqur Rahman, chairman of Standard, said in a separate interview. “We can’t keep our dyeing and washing units shut due to the power outage. If we do, all the fabrics will go to waste.”
What do Q1 numbers tell us about the Indian economy?
The central government’s fiscal deficit for the first quarter of April-June period came in at 21.2 percent of the full-year target of Rs 16.6 trillion. That’s lower than expected due to higher tax collection and lower spending on subsidies.
The deficit in the corresponding period last year was 18.2 percent of the FY22 budget estimate of Rs 15.07 trillion. The government said it is sticking to the current fiscal deficit target of 6.4 percent of GDP for FY23.
Led by the ongoing economic recovery and improvement in GST compliance, the net tax revenue in Q1 was Rs 5.06 trillion, that is 26.1 percent of budget estimates, compared to 26.7 percent last year.
On the expenditure side, the government’s spending on major subsidies including food and fertilisers, came down to nearly Rs 68,000 crore during April-June period, compared to about 1 trillion rupees a year earlier.
At Rs 9.48 trillion, total expenditure in Q1 was 24 percent of FY23 budget size of Rs 39.4 trillion.
In the first quarter, 23.4 percent of capital expenditure target of Rs 7.5 trillion was achieved. It was Rs 1.75 trillion compared with Rs 1.11 trillion last year.
Meanwhile, on the economy side, India’s eight core infrastructure sectors grew in double digits in the April-June period.
The disaggregated trends of core sector data are mixed, ranging from a muted 0.6 percent growth for crude oil to a robust expansion of 31.2 percent for coal. Apart from crude, steel and natural gas demonstrated Imports grew twice as fast, growing 47.4 percent to $187 billion. single digit growth.
Retail inflation averaged 7.3 percent during the quarter. For each of the three months, it has remained above the RBI’s upper tolerance limit of 6 percent.
Both widening Current Account Deficit and dollar strength have weighed upon the rupee, which depreciated 4.4 percent so far this fiscal. Current Account Deficit is seen at 3 percent of GDP in FY23 versus 1.2 percent last fiscal.
IMF sees rebound in Malaysian economy
Malaysia should expect to see a gradual rebound in its economy this year, according to a projection by the International Monetary Fund (IMF).
The improvement has been attributed to the resilience of its manufacturing sector and the return of tourists now that borders have reopened.
Similar positive signs are also appearing in Thailand and the Pacific island countries.
However, prospects are not as great for the Asia-Pacific region as a whole.
According to a Bloomberg report this morning, the IMF has lowered its growth forecast for the region to 4.2 percent. That is 0.7 percentage point down from its forecast in April which, the report noted, was well below the region’s 6.5 percent growth in 2021.
The IMF was also less upbeat on its expectations for 2023, reducing its projection by 0.5 percentage point to 4.6 percent.
It attributed the not-so-positive prospects to the fact that “the ongoing spillover from shocks” caused by the Russian invasion of Ukraine, China’s economic lockdown to curb the spread of Covid-19 and rising interest rates, were already materialising.
Krishna Srinivasam, director of the Asia and Pacific Department at the IMF, wrote on his blog that this was compounding the regional growth spillover from China’s slowdown.
“Increased trade policy uncertainty and a fraying supply chains are also expected to delay economic recovery and exacerbate scarring from the pandemic,” Srinivasan wrote.
Financial institutions trust Maldives, finance minister
Maldives’ Minister of Finance Ibrahim Ameer said on Sunday that support from both the International Monetary Fund (IMF) and World Bank over the government’s decision to hike the GST and Travel GST indicate their confidence in the island nation’s economic stability.
The minister highlighted this via tweet, noting the endorsement of both IMF and World Bank were encouraging for the state in its efforts.
Minister confirms of effective strategies to reduce state expenditure while boosting revenues under the fiscal strategy for the period 2023 to 2025.
Ameer stressed on the importance of state’s fiscal strategy for a sustainable economy of the island nation.
Objectives under the strategy include reducing the dependency of state-owned enterprises on state expenditure, while ensuring government expense stability.
State relies on the opinion and recommendations of both IMF and World Bank in its efforts to redeem outdated fiscal policies, and the overall improvement of economic aspects.
IMF in its economic outlook for the Maldives projects the global economy will impact Maldives’ economy as well, owing to the rising commodity prices in global markets.
The international financial body projects Maldives inflation rate to hike by 3 percent.
| Maldives GDP In Statistics | ||||
|---|---|---|---|---|
| Related | Last | Previous | Unit | Reference |
| GDP | 4.89 | 3.74 | USD Billion | Dec 2021 |
| GDP per capita | 8673.83 | 6660.83 | USD | Dec 2021 |
| GDP per capita PPP | 16595.97 | 12744.43 | USD | Dec 2021 |
| GDP From Construction | 3557.10 | 3659.40 | MVR Million | Dec 2021 |
| GDP From Agriculture | 3927.30 | 3867.30 | MVR Million | Dec 2021 |
| GDP From Public Administration | 6692.80 | 6930.50 | MVR Million | Dec 2021 |
| GDP From Services | 38794.20 | 57633.10 | MVR Million | Dec 2020 |
| GDP From Manufacturing | 1335.00 | 1686.00 | MVR Million | Dec 2020 |
| GDP From Utilities | 1396.00 | 1395.00 | MVR Million | Dec 2020 |
| GDP From Transport | 2301.30 | 4327.00 | MVR Million | Dec 2020 |
Nepal’s economic alarm bells
Every year, as the monsoon kicks in, there’s a feverish spurt of road-building and infrastructural development across Nepal. It has nothing to do with preparing Nepal’s notoriously accident-prone roads for the rains, but with a term that is peculiar to the country: asaare bikas. The Nepali fiscal year ends in the Hindu calendar month of Asaar (around mid-July), and since budgetary allocations under capital expenditures lapse at the end of the fiscal year, government departments rush to spend whatever they can before the fiscal year runs out.
This year, the government outdid all previous records by paying out NPR 14.72 billion (USD 116 million) to various departments on a single day in July for capital expenditure. Despite the splurge, only 57 percent of the allocated budget could be spent by the end of the fiscal year – in the first six months the figure was an astoundingly low 13 percent. One can guess what the condition of roads would be if the concerned department is spending most of its allocation in a single month.
In recent months, however, Nepal’s fiscal mismanagement has come under intense public scrutiny, courtesy a not-so-rosy picture of the economy. Ballooning import costs, due to Nepal’s weakening rupee vis-a-vis the dollar as well as a sharp rise in global inflation, have led to a sharp decline in the country’s foreign exchange reserves. There are fears – although many think it to be premature – that Nepal may head the Sri Lanka way.
Overview and impact of Singapore’s green plan 2030
The Singapore government unveiled the Singapore Green Plan 2030 (“Green Plan”) in February 2021, a “whole-of-nation movement” to advance Singapore’s national agenda on sustainable development. A progress update on the Green Plan was provided during the Committee of Supply Debate in March 2022 (“Green Plan Progress Update”), where the Singapore government made various updates and announcements on the key targets and initiatives in support of the Green Plan.
The Green Plan charts ambitious and concrete targets over the next decade, strengthening Singapore’s commitments under the United Nation’s 2030 Sustainable Development Agenda and the Paris Agreement.
The Green Plan seeks to rally bold and collective action to tackle climate change, and positions Singapore to achieve its long-term net-zero emissions aspiration as soon as viable.
Spearheaded by five ministries, the Green Plan features five key pillars: (i) City in Nature, (ii) Sustainable Living, (iii) Energy Reset, (iv) Green Economy, and (v) Resilient Future. In order to achieve these pillars, the Singapore government has introduced a wide array of initiatives and support measures in the research and development, energy, green finance, sustainable tourism, and land transport sectors.
| Japan Indicators In Statistics | ||||
|---|---|---|---|---|
| Details | Last | Previous | Value in | Reference |
| Currency | 133 | 133 | – | Aug/22 |
| Stock Market | 27743 | 27598 | points | Aug/22 |
| GDP Growth Rate | -0.1 | 1 | percent | Mar/22 |
| GDP Annual Growth Rate | 0.2 | 0.4 | percent | Mar/22 |
| GDP Growth Annualized | -0.5 | 4 | percent | Mar/22 |
| Unemployment Rate | 2.6 | 2.6 | percent | Jun/22 |
| Inflation Rate | 2.4 | 2.5 | percent | Jun/22 |
| Inflation Rate Mom | 0 | 0.3 | percent | Jun/22 |
| Interest Rate | -0.1 | -0.1 | percent | Jul/22 |
| Balance of Trade | -1384 | -2386 | JPY Billion | Jun/22 |