As challenges mount China’s economic activity falters
China’s industrial output and retail sales faltered in August as the economy lost momentum, adding to expectations Beijing will step up stimulus efforts in the final months of the year.
Industrial output grew at the slowest pace since March while retail sales, a gauge of consumption, had their second-slowest month of the year, data from the National Bureau of Statistics showed, despite August being the summer holiday month. The NBS said “in general the economy was operating smoothly in August”. But it said economic activity “still faces many difficulties and challenges in its continued recovery”, blaming an adverse external environment and “insufficient” domestic effective demand. Industrial output rose 4.5 percent year on year, down from 5.1 percent in July and missing the average forecast of analysts polled by Bloomberg of 4.7 percent. Retail sales rose 2.1 percent against a year earlier compared with 2.7 percent in July and against analysts’ average forecasts of 2.6 percent. President Xi Jinping this week called for officials to meet the country’s annual economic and social development goals, which analysts interpreted as urging them to hit this year’s gross domestic product growth target of 5 percent year on year.
By 2031 Asia Pacific to lead blockchain in insurance
Asia Pacific is expected to lead the blockchain in the insurance market in terms of revenue by 2031, with the fastest projected growth at a 57.6 percent CAGR during the forecast period, according to a report by Allied Market Research. The global blockchain in the insurance market is expected to reach $32.9b by 2031, with a compound annual growth rate (CAGR) of 52.4 percent from 2022 to 2031. North America accounted for nearly 40 percent of the global blockchain in the insurance market in 2021. The global market, valued at $496.9m in 2021. In insurance, blockchain can help insurers and customers create smart contracts that streamline claim management, leading to improved fraud detection and prevention. The growing demand for secure online platforms, driven by concerns about data privacy, security, and the need for remote services, is expected to further drive market growth. The COVID-19 pandemic had a positive impact on blockchain adoption in insurance, highlighting the need for trust, transparency, and accurate risk assessment. Blockchain helped insurers assess COVID-19-related risks more efficiently by analysing data from various sources, such as medical records and social media.
Bangladesh says World Bank pledges over $2 bn for reforms
Bangladesh said on Tuesday the World Bank has committed to providing over $2 billion in new financing this fiscal year to support the country’s ongoing reform efforts, flood response initiatives, and improvements in air quality and healthcare. The announcement was made by the World Bank’s Country Director, Abdoulaye Seck, following a meeting with the head of the interim government Nobel laureate Muhammad Yunus in Dhaka on Tuesday, his office said in a statement. “We would like to support you as fast as possible and as much as possible,” Yunus’ office quoted Seck as saying, underscoring the bank’s commitment to addressing Bangladesh’s financial needs as it embarks on critical reforms under the interim government, formed last month following the ousting of Prime Minister Sheikh Hasina after deadly protests. The World Bank also plans to repurpose an additional $1 billion from existing programs, which will raise the total amount of soft loans and grants to approximately $3 billion for this fiscal year that ends in June 2025. The funds will be used to support a variety of key areas, including the country’s response to natural disasters and economic reforms. Seck highlighted the importance of the reforms for Bangladesh’s future, particularly for its youth, with two million people joining the job market each year. “The completion of the reforms will be critically important for Bangladesh and its young people,” he said.
Japan economic review in 2024
In light of the announcement of the Apr-Jun 2024 GDP 1st preliminary results, experts have revised their economic outlook. Experts now see growth in Japan’s real GDP according to their main scenario at +0.9 percent in FY2024, and +1.3 percent in FY2025 (on a calendar year basis we expect +0.1 percent in 2024 and +1.6 percent in 2025). They expect real wages to continue growing during the 2024 Jul-Sep period and beyond due to wage hikes continuing at a high level as a result of the 2024 spring wage negotiations. They also expect the underlying inflation rate to stabilize at around 2 percent due to the cycle of wage increases and price pass-through. Meanwhile, Japan’s economy can expect to find underlying support and growth factors including the Flat-amount Cut of Personal Income Tax and Personal Residence Tax, recovery production in motor vehicles, growth in inbound consumption, the high level of household savings, and the recovery of the silicon cycle. However, vigilance is necessary regarding downside risk in the overseas economy and the possibility of appreciation of the yen. They also assume that the Bank of Japan (BOJ) will raise the short-term interest rate to 0.50 percent in the Jan-Mar 2025 period, followed by additional rate hikes at a pace of once every six months, 0.25 percent pt at a time, while closely monitoring economic and price conditions. However, an accommodative monetary environment will likely be maintained, with real short-term interest rates remaining in negative territory throughout the forecast period. They also expect the influence of reductions in the amount of government bond purchases by the BOJ on the long-term interest rate to be limited for the time being.
Sri Lanka to vote on Saturday in first poll
Cash-strapped Sri Lanka will vote for its next president on Saturday in an effective referendum on an unpopular International Monetary Fund (IMF) austerity plan enacted after the island nation’s unprecedented financial crisis.
President Ranil Wickremesinghe urged voters to give him a fresh mandate to continue with austerity measures he says stabilised the economy and ended months of food, fuel and medicine shortages.
“We must continue with reforms to end bankruptcy,” Wickremesinghe, 75, said at his final rally in Colombo on Wednesday night.
“We must build a new economy.”
He has restored calm to the streets after civil unrest spurred by the downturn in 2022 saw thousands storm the compound of his predecessor, who promptly fled the country.
SCB EIC forecasts Thailand’s GDP growth at 2.5pc for 2024 and 2.6pc for 2025
SCB EIC estimates that Thailand’s GDP will expand at a low of 2.5 percent in 2024, as well as 2.6 percent in 2025, which is still below the growth potential of the Thai economy. For next year, SCB EIC expects the number of foreign tourists to decline slightly from the previous view to 39.4 million. On the challenge of the number of Chinese tourists in group tours who have not fully returned.
In 2025 Vietnam’s economy to grow 6.5-7.5 pc
Vietnam’s economy is forecast to grow around 6.5 to 7.5 percent next year in the economic development scenarios presented by the Ministry of Planning and Investment, local media reported Wednesday.
The country’s gross domestic product (GDP) growth is predicted at 6.5-7 percent in its first scenario with the inflation rate staying at 4-4.5 percent. The average economic expansion for the 2021-2025 period will be 5.8-6 percent.
In the second scenario, the ministry eyes a GDP growth of around 7-7.5 percent, and inflation rate at 4.5 percent. The average GDP growth is projected at 5.9-6.1 percent.
The ministry has been in favor of the first one since the domestic economy has been affected by adverse external developments, while several intrinsic problems could not be improved in a short term.
The Asian Development Bank predicted that the Vietnamese economy will grow 6.2 percent in 2025 while the World Bank forecast a 6.5 percent growth next year.
Philippines urged to invest in 5g
At the Ericsson Imagine Live event held recently in Makati, industry leaders highlighted the crucial role 5G will play in transforming sectors like healthcare, education, and manufacturing, while emphasizing its potential as the backbone of the nation’s digital economy.
“Today, digital infrastructure is as critical as the highways were 40 or 50 years ago. The countries that invest now in 5G will be those leading the global digital economy in the coming years,” said Andres Vicente, SVP and head of Ericsson Southeast Asia, Oceania, and India.
According to Vicente, the Philippines’ GDP stands to benefit from the digital economy, which currently accounts for about 15 percent of the country’s overall output. He emphasized that this figure is considerably lower compared to the world’s most developed digital ecosystems, where the digital economy makes up 30 percent of GDP.
Malaysia’s total trade soars to Rm252.7b in August
Malaysia’s total trade remained on a double-digit growth path in August 2024, boosted by a thriving global economy, Chief Statistician Malaysia Datuk Dr Mohd Uzir Mahidin said in a statement today,
Total trade last month increased to RM252.7 billion, a jump of 18.6 percent from RM213 billion in August 2023. The strong performance was primarily driven by growth in imports of 26.2 percent, which reached RM123.5 billion, and exports by 12.1 percent, valued at RM129.2 billion.
Mohd Uzir highlighted that Malaysia’s exports increased in August 2024 in tandem with the rise in domestic exports (82.3 percent to total exports), up by 15.5 percent to RM106.4 billion. However, re-exports (17.7 percent to total exports) were down by 1.2 percent compared to August 2023, to RM22.8 billion.
Meanwhile, imports were worth RM123.5 billion, an increase of 26.2 percent. The trade surplus decreased by 67.3 percent to RM5.7 billion. It was the 52nd consecutive month of surplus since May 2020.
Comparing with July 2024, exports, imports, total trade and trade balance recorded decreases of 1.5 percent, 1.0 percent, 1.2 percent and 11.5 percent, respectively.
From the perspective of commodity group, 169 out of 259 export groups and 197 out of 259 import groups showed an increase compared to the same month of the previous year.