World Bank maintains Malaysian GDP growth forecast at 4.3pc for 2024
The World Bank on Monday maintained its forecast for Malaysia’s economy to grow 4.3 percent this year, as household spending accelerates amid moderate inflation, but flagged narrow fiscal space and potential downside from external risks.
Malaysia’s gross domestic product (GDP) will likely expand 4.3 percent this year, the multilateral agency said in its East Asia and Pacific April 2024 Economic Update report, unchanged when compared to its October 2023 forecast. For 2025, the World Bank expects the country’s economic growth pace to pick up slightly to 4.4 percent.
“In 2024, growth is expected to pick up, as the risk of a global recession recedes,” the World Bank said. “The recovery in the tech cycle, which could boost electric and electronics exports, could also have positive spillovers to growth.”
The World Bank’s forecast is in line with Malaysia’s official projection of growth of between 4 percent and 5 percent in 2024, versus a 3.7 percent expansion in 2023.
XI Jinping plans to overtake America
Last year Xi Jinping, China’s leader, paid a visit to Heilongjiang in the country’s north-east. Part of China’s industrial rustbelt, the province exemplifies the problems besetting China’s economy. Its birth rate is the lowest in the country. House prices in its biggest city are falling. The province’s gdp grew by only 2.6 percent in 2023. Worse, its nominal gdp, before adjusting for inflation, barely grew at all, suggesting it is in the grip of deep deflation.
Never fear: Mr Xi has a plan. On his visit, he urged his provincial audience to cultivate “new productive forces”. That phrase has since appeared scores of times in state newspapers and at official gatherings. It was highlighted in last month’s “two sessions”, annual meetings of China’s rubber-stamp parliament and its advisory body. In the preface of a new book on the subject, Wang Xianqing of Peking University likens the term to “reform and opening up”, the formula that encapsulated China’s embrace of market forces after 1978. Those words “shine” even today, he wrote, implying that “new productive forces” will have similar staying power.
India’s GDP set to grow 8pc or more
India’s gross domestic product (GDP) is on track to grow by 8 percent or more in the quarter ending March 31, Finance Minister Nirmala Sitharaman said on Saturday.
The economy is expected to show the same rate of year-on-year expansion for the 2023/24 financial year, Sitharaman added, citing the impact of improved inflation management and macroeconomic stability.
“Hopefully the fourth quarter … will also have (growth) of 8 percent or above 8 percent resulting in 2023/24 having an average growth in GDP of 8 percent or over 8 percent,” Sitharaman said during an event in the financial hub of Mumbai.
India’s GDP data for the Jan-March quarter is due to be released on May 31.
Asia’s third-largest economy grew 8.4 percent in the October-December quarter year-on-year, outpacing the 7.6 percent growth recorded for the previous quarter.
India’s economy is projected to grow at 7.6 percent in the current fiscal year to March 31, according to the latest government estimates.
Japan’s economic agony lasted for 30 years.
After a catastrophic real-estate implosion in the early 1990s, the country’s economy spent the next three decades shrinking. Households and businesses had to spend their money paying off debt, which prevented them from investing or starting new ventures. Wages were stagnant. And the economy slid from the world’s second largest to its fourth. Animal spirits were neutered.
Eight years ago, policymakers tried to bring them back by taking interest rates into negative territory. For a while, it was slow going. But Japan’s economy — the long-unconscious patient — recently started to wiggle its toe. Japan’s labor unions in March scored the biggest wage increase for workers in decades. The country’s stock market is ripping; the Nikkei recently exceeded the all-time highs it set 34 years ago. Analysts at Goldman Sachs are telling clients there’s still more upside to be had as corporate-governance reforms and a new era of sustainable inflation take hold. The Bank of Japan this month hiked interest rates above zero for the first time since 2007, a sign of confidence in the country’s recovery.
Dev partners interested to aid Bangladesh
The notion that the country’s economy could deteriorate has dissipated, Finance Minister Abul Hassan Mahmood Ali said yesterday, adding that now there is an increased interest from development partners in cooperating with Bangladesh across various sectors.
“Our remittance is increasing and the dilemmas surrounding the economy have passed. The opposition was spreading propaganda that we would turn into Sri Lanka, which we haven’t. We are stable,” he said during a pre-budget discussion for the fiscal 2024-2025 held with the Economic Reporters Forum (ERF) at the Secretariat.
Furthermore, the minister shared insights from yesterday’s visit by representatives of the Asian Infrastructure Investment Bank, who affirmed the stability of Bangladesh’s economy and offered financial assistance as needed.
When asked whether there are plans to establish the Bank Commission and Revenue Commission in the upcoming budget, the minister said, “Since discussions are ongoing and nothing can be said definitively at this moment.”
Jakarta to remain economic hub
Indonesia’s parliament on Thursday designated special status for Jakarta, keeping the metropolis as the country’s economic epicentre, amid plans to move the capital city to Borneo island.
Indonesia plans to move its capital city away from congested and sinking Jakarta, to Nusantara, a $32-billion city under construction in the jungles of East Kalimantan on Borneo.
The city is a flagship project of outgoing President Joko Widodo, who pledged to redistribute wealth and development currently concentrated in Java, across the archipelago.
An “agglomeration” council will be created to harmonise development plans between Jakarta and its satellite cities, according to a copy of the new law dated March 18 seen by Reuters.
Home Affairs Minister Tito Karnavian said after deliberation in parliament that Jakarta should still be improved to compete with other “world-class cities” once the seat of government has been moved to Nusantara.
“After it’s no longer a capital, it still has to be sealed with a special status so that it can accelerate economic growth and to increase contribution to the country’s GDP,” he said.
Remittance-fuelled economy has traditionally been detrimental to Nepal
The country’s economy that was badly hit by Covid pandemic has been unable to bounce back. The market is rather depressed and the government has failed to pep it up. Post’s Thira Lal Bhusal sat down with economist and former vice-chair of the National Planning Commission Biswo Poudel, who offers insights on Nepal’s historical as well as current economic policies and practices.
Let’s start with the current economic outlook, which is rather grim. While a huge amount of money is stacked in banks there is no economic activity in the market. How do you see this?
It’s true that the deposit is huge. According to Nepal Rastra Bank data, the deposit is over Rs6,100 billion while the lending is over Rs5,000 billion. It is for the first time that we have this amount of money deposited in banks. Also, we have significant foreign exchange reserves. But the problem is that there is no expenditure in the market. This indicates people don’t have confidence about the future of the market. People are neither spending nor borrowing. In this case, I think the Keynesian prescription should be followed. That suggests increasing government expenditure to encourage spending by the private sector, with the goal of rejuvenating overall market activities by creating demand.
PH economy forecast to grow by 6.1pc in q1
Philippine economic growth is projected to accelerate in the first quarter of the year, mainly driven by the government’s infrastructure spending, a report released by the First Metro Investment Corporation (FMIC) and the University of Asia and the Pacific (UA&P) said.
In the latest issue of The Market Call released on Monday, FMIC and UA&P forecast the country’s gross domestic product (GDP) to grow by 6.1 percent in the first quarter of the year.
“The economy looks set to accelerate in 2024 with Q1 (first quarter) GDP estimated at 6.1 percent as infrastructure spending goes into high gear with national government (NG), buoyed by ODA (official development assistance) funding, and PPP (public-private partnership) projects gain traction,” the report said.
FMIC and UA&P expect NG and infrastructure spending to accelerate this year.
“We expect NG to have a strong start in 2024 after the understandable tentativeness of the different departments at the start of 2023 when the then new administration had just been in an organizational mode,” FMIC and UA&P said.
“Infrastructure spending, both government-funded [i.e., huge PHP1.0-trillion Department of Public Works and Highways budget alone] and PPP projects, should accelerate in 2024 as NG bids out and awards large undertakings starting with the recent $3.0-b(illion) Ninoy Aquino International Airport (NAIA) expansion,” they added.
Over 3-5 years bank of Singapore names Dubai compliance head, builds Middle East business
Bank of Singapore, one of Asia’s biggest private banks, said on Monday it has appointed Jibu George as its compliance head for its Dubai International Financial Centre (DIFC) branch in Dubai effective Monday.
“The UAE and the Middle East region have been important to Bank of Singapore’s strategic growth and will remain so as we continue to strengthen our global footprint,” said Ranjit Khanna, Bank of Singapore’s Europe and Middle East private banking head and DIFC branch chief executive, in a statement.
Bank of Singapore, the private banking arm of Singapore’s second largest lender Oversea-Chinese Banking Corporation or OCBC, is building its business in the Middle East region over the next three to five years, Khanna said.
George joined Bank of Singapore from LGT Private Bank, where he was the chief risk and compliance officer for the Middle East business since 2017, according to the statement.
Economic conditions in debt-stricken Sri Lanka improving: IMF
The economic situation in debt-stricken Sri Lanka has started to gradually improve following its worst economic crisis two years ago, the International Monetary Fund (IMF) has said.
Inflation has come down from a peak of 70 percent in 2022 to 5.9 percent last month and the country’s economy expanded in the second half of last year following a year and a half of contraction, the IMF said on Thursday.
Sri Lanka’s year-on-year economic expansion in the third quarter of 2023 was 1.6 percent, and in the fourth quarter 4.5 percent, the IMF said.
The economic crisis in early 2022 left Sri Lankans suffering from severe shortages of food, medicine, fuel and power, drawing strident protests that led to the removal of then-President Gotabaya Rajapaksa.
The Indian Ocean island nation declared bankruptcy in April 2022 with more than $83bn in debt – more than half of it to foreign creditors.
Sri Lanka turned to the IMF for help to rescue the economy and secured a bailout package last year.
Under the current four-year bailout programme, the IMF is to disburse $2.9bn in tranches after biannual reviews of whether the country is imposing needed economic reforms.
The country has received two payments so far and also has received promises of debt forgiveness from major creditors like India, Japan and China. The government also is in talks with private creditors.
On Wednesday, the IMF said a team of its officials had reached an agreement with Sri Lankan authorities on the second review of economic reforms.