Deflation: why falling prices in China raise concerns
China’s economy has slipped into deflation as consumer prices declined in July for the first time in more than two years. The official consumer price index, a measure of inflation, fell by 0.3 percent last month from a year earlier. Analysts said this increases pressure on the government to revive demand in the world’s second largest economy. This follows weak import and export data, which raised questions about the pace of China’s post-pandemic recovery. The country is also tackling ballooning local government debt and challenges in the housing market. Youth unemployment, which is at a record high, is also being closely watched as a record 11.58 million university graduates are expected to enter the Chinese job market this year. Falling prices make it harder for China to lower its debt – and all the challenges which stem from that, such as a slower rate of growth, analysts said. “There is no secret sauce that could be applied to lift inflation,” says Daniel Murray from investment firm EFG Asset Management. He suggests a “simple mix of more government spending and lower taxes alongside easier monetary policy”. Most developed countries saw a boom in consumer spending after pandemic restrictions ended. People who had saved money were suddenly able and willing to spend, while businesses struggled to keep up with the demand.
Deciphering India’s economic potential
The growth trajectory of India’s economy in the current decade warrants global attention. Having already broken into the top five global economies, India’s rapid growth, spurred by a vast and young population, makes its future potential seemingly boundless. However, the narrative is a double-edged sword. A potent combination of significant economic growth and demographic advantages simultaneously masks and reveals deep-seated challenges that, if not addressed, may undermine the nation’s ascent. India, with its GDP growth of 7 percent in 2022, dwarfed the global average and stood head and shoulders above other major economies. This growth, combined with its youthful population, suggests the country could soon rank behind only the US and China in economic output. The potential of this demographic dividend – over half the population under 30 – can’t be overstated. However, for this dividend to truly pay off, India must confront issues surrounding education, public health, and the participation of women in the workforce. Despite having a large reservoir of labor, the quality of education and training falls woefully short. Without investment in these sectors, the country’s human capital will remain underutilized. Public health, too, is a paramount concern. An effective healthcare system is a sine qua non for a productive workforce and a resilient economy. Failure to invest in these foundational elements could negate the promise of the demographic advantage and render it a burden.
Bangladesh’s economy growing
Bangladesh’s economy is progressing rapidly, despite a considerable gap in income equality, but the governance indicators have been on a steep decline since 2022, as shown in a report by World Economics published in June earlier this year. The report provides a more realistic view of Bangladesh’s economy, but experts caution that this may be challenging in a country facing significant governance and corruption issues.
According to World Economics, Bangladesh is ranked 122nd globally, 19th in the Asia-Pacific region, and 25th among Frontier Markets for governance.
In the last three reports, there has been a focus on Bangladesh’s strong economic growth.
However, recent reports have shed light on aspects like governance and income equality in the country.
The report emphasizes that despite the high but uncertain GDP per capita growth rate, Bangladesh continues to be classified as a poor country.
The data in the report is based on various sources, including the World Bank (Rule of Law), RSF (Press Freedom), Freedom House (Political Rights), and Transparency International (Corruption Perceptions) reports.
Bangladesh’s scores for Data Grade, Global/Regional or Asia-Pacific Ranks, Governance Index, Rule of Law, Press Freedom, Political Rights, and Corruption scale are E, 125/20, 24, 38.8, 39.5, 41.9, and 27.8 respectively.
Data has been indexed on a scale of 0-100 for comparison purposes. where 0 = bad and 100 = as good as it gets.
Indonesia q2 gdp growth strongest in three quarters
Indonesia’s economic growth in the second quarter accelerated unexpectedly to its highest rate in three quarters, shored up by strong household and government spending, even as exports weakened with falling commodity prices.
Some economists still expect activity to slow in the second half of the year, with exports likely to keep falling due to weaker global demand and businesses potentially delaying investments ahead of general elections due in February 2024.
The government plans to boost spending this quarter to reach its 5.3 percent growth target for the year, chief economic minister Airlangga Hartarto told reporters on Monday.
Separately, the finance ministry is projecting that GDP growth will be around 5.1 percent this year, highlighting risks of global economic slowdown impacting exports.
Southeast Asia’s biggest economy expanded 5.17 percent in the April-June quarter from the same period a year earlier, Statistics Indonesia data showed, outpacing the 4.93 percent growth predicted by economists polled by Reuters. First-quarter growth was revised up slightly to 5.04 percent.
Despite Indonesia’s interest rate hikes of 225 basis points from August 2022 to January 2023, household consumption, which makes up over half of GDP, expanded 5.23 percent on a yearly basis last quarter, the quickest pace since the third quarter of 2022.
Anwar says Malaysia on right track to boost economy
The country is on the right track to move forward, especially in terms of economic development, Prime Minister Datuk Seri Anwar Ibrahim said.
In a Facebook post, Anwar said he had highlighted this during the state election campaign at Paroi Stadium, in Seremban yesterday, which was also attended by unity government party leaders.
The prime minister said various policy measures are being undertaken currently towards this purpose.
“This country must be saved from those who talk about transparency and whatnot but in reality, their actions are far from it.
“The power entrusted must be focused on the empowerment of rights and the economy of the people,” he said.
In this regard, he called on all races to back the unity government in the interest of stability and its efforts to empower the people and the economy.
The programme was participated by thousands of supporters and also leaders from Barisan Nasional (BN), Gabungan Parti Sarawak (GPS), Gabungan Rakyat Sabah (GRS) and Warisan. — Bernama
The economic impact of renewable energy in the Maldives
Renewable energy is no longer a niche market. As the world grapples with the urgent need to combat climate change, renewable energy has emerged as a powerful tool in the fight. One country that is harnessing the potential of renewable energy is the Maldives, an island nation in the Indian Ocean. The economic impact of renewable energy in the Maldives is a testament to the transformative power of clean energy.
The Maldives is uniquely positioned to reap the benefits of renewable energy. With an abundance of sunlight and wind, the country has the potential to generate significant amounts of solar and wind energy. This is particularly important given the Maldives’ dependence on imported fossil fuels, which not only contributes to greenhouse gas emissions but also puts a strain on the country’s economy.
The shift towards renewable energy in the Maldives has been facilitated by a combination of government initiatives and private sector investment. The government has set ambitious targets for renewable energy adoption, aiming to achieve 30 percent of daytime electricity generation from renewable sources by 2023. This has been complemented by significant investment from the private sector, with companies recognizing the economic potential of renewable energy.
Mongolia looks to rise out of China and Russia’s shadow
In the last week of June, Mongolian Prime Minister Luvsannamsrain Oyun-Erdene went to Beijing. He met Chinese President Xi Jinping at the Great Hall of the People and came away with a raft of agreements deepening economic and trade ties with his southern neighbor. But around the same time, Mongolian officials in the capital Ulaanbaatar met with Jose Fernandez, the U.S. undersecretary of state for economic growth, energy and the environment, and signed a memorandum of understanding to collaborate on cultivating a supply chain of critical minerals and rare earth elements — resources that are key to the world’s clean energy transition and plentiful in Mongolia.
Jollibee made Filipino food global
On July 6, National Fried Chicken Day in the United States, Vincent Cruz and a crowd of supporters marched into a Jollibee’s branch in Journal Square, New Jersey.
Cruz and 50-odd employees and supporters wanted to get the attention of management and customers alike on the busiest day of the year for the Philippine fast food chain.
Cruz is among nine Filipino former employees at the Journal Square branch who claim they were terminated by Jollibee management in February after petitioning for better wages and working conditions.
Standing in front of the cashier, the 19-year-old former fry cook held up a megaphone and yelled the demands of the new “Justice 4 Jollibee Workers” campaign, including reinstatement, back pay, an apology from Jollibee and a hike in the base pay from $14 to $17 an hour.
“For all fellow workers who have experienced or are currently experiencing similar struggles, we want you to be brave and take action,” Cruz, who migrated to the US in 2021, told Al Jazeera.
Stripe report: digital trade’s impact on Singaporean businesses
US-based payments processor Stripe has published a report, detailing how digital trade is reshaping the global economy and how companies are reacting to it.
The report is based on transaction data generated from the Stripe platform as well as surveys with 1,700 business leaders and 11,500 consumers across nine global markets: Australia, France, Germany, Ireland, Japan, Mexico, Singapore, the UK, and the US. It depicts how technology is diversifying international trade routes and offers greater inclusion in the global economy for businesses of all sizes in Singapore.
Despite macroeconomic hurdles, both businesses and consumers are optimistic about buying and selling more outside of Singapore. 84 percent of businesses are planning to expand into other countries by 2025, while 30 percent expect more than 75 percent growth internationally by 2028.
Although the path to international achievement is intricate, and the development of hyper-localised market expansion strategies required for this growth might be challenging to formulate and execute, businesses in Singapore report less constraints on their operations compared to earlier times. 59 percent think it is easier to run an international business now compared to 2018. Only 25 percent find it harder to do so.
Thai economy recovering
Thailand’s economy continues to recover, the central bank chief said on Wednesday, adding growth forecasts may need to be revised down and exports were not looking good this year. Bank of Thailand Governor Sethaput Suthiwartnarueput told a central bank seminar adding the economy is expected to grow in the mid 3 percent range.