In Bangladesh an anatomy of the current economic situation
The economy of Bangladesh is at such a critical juncture, struggling with both long-standing structural problems and newly emerging issues. Though exports and remittances have shown improvement in recent times, continuing macroeconomic instability, high inflation, and political unrest continue to shake the prospects for sustainable growth and recovery. These imperative challenges now require well-coordinated strategies and overall reform initiatives that will stabilise the economy on the pathway of resilient and sustainable growth.
Despite the expected recovery, the incidence of macroeconomic instability remains high, denting confidence. Inflation is still at a high level, shredding real incomes and further increasing financial vulnerability among the population. For more than two years, monetary policy has periodically resorted to raising interest rates to combat inflation. Though since May 2022 until now, Bangladesh Bank has hiked the repo rate by 11 times, the impact remains marginal. In the context of persistently high inflation for more than two years and the resulting erosion of real incomes, the effectiveness of controlling inflation through demand contraction via higher interest rates has come under scrutiny.
Economists cautious on Hong Kong, Singapore growth in 2025
GROWTH in Hong Kong and Singapore for next year may come under pressure as Donald Trump returns to the White House armed with tariffs that may further slow China’s economy, according to the latest estimates from a Bloomberg survey.
Economists cut their quarterly outlooks for HK through the first half of 2025 by at least 0.5 percentage points, the survey showed. The yearly estimate is now reduced to 2.2 percent from 2.6 percent, according to the latest median forecast of 29 economists carried out over the past week.
“Hong Kong’s economic pressure will become increasingly apparent under Trump 2.0 and limited stimulus in China,” said Gary Ng, senior economist at Natixis. “While the lower interest rates may help, the uncertain path may still affect the recovery in consumption and investment.”
Hong Kong’s government revised this year’s GDP forecast to 2.5 percent from a range of 2.5 percent-3.5 percent. Cindy Keung, an economist at OCBC Bank, expects 2024 growth at 2.4 percent with the economy expected to slow to 2.2 percent next year.
Singapore’s economy is likely to expand 3.5 percent in each of the first two quarters of next year, according to the latest survey. However, economists cut their outlook by more than one percentage point to 1.5 percent in the third quarter and expect the economy to grow at 2.5 percent in the last quarter in 2025.
Annual outlook for next year is upgraded to 2.6 percent from 2.5 percent previously, according to 33 economists.
Asia-Pacific markets mostly rise
Asia-Pacific markets traded mostly higher on Monday as the region kick-started a data-heavy week, with investors focused on economic readings from several countries, including Japan, South Korea and China.
Over the weekend, China released its official purchasing managers’ index reading for November. Manufacturing PMI came in at 50.3 — its highest level since April — beating the 50.2 expected by economists polled by Reuters. Manufacturing PMI came in at 50.1 in October.
China’s non-manufacturing PMI slipped to 50.0 from 50.2 in the previous month, while composite PMI held steady at 50.8.
A reading higher than 50 shows expansion in activity, while below that shows contraction.
On Monday, manufacturing PMI readings from S&P Global will be released for economies throughout Asia, including the Caixin PMI survey for China.
Australia’s retail sales rose 3.4 percent in October, its fastest year-on-year rise since May 2023.
Indonesia will disclose its inflation numbers for November later in the day.
China’s stimulus measures are just trickling through the economy
China’s latest efforts to kickstart growth haven’t had a broad impact yet, data and company earnings show, indicating the world’s second-largest economy won’t be roaring back soon.
Growth in pockets from real estate to manufacturing has improved since Beijing began announcing stimulus measures in late September. Companies, however, have maintained a cautious tone when sharing outlooks in the last few weeks.
When asked on an earnings call Friday about the impact of stimulus, food delivery giant Meituan
only said that in October, the average hotel order value in its newer travel booking business fell less than in the prior months, on an year-on-year basis.
“While it will take some time for the positive effect to fully materialize and to further [expand] to more consumption categories, we are confident that these policies will gradually provide more support for the real economy and incentivize consumer spending, bringing more growth opportunities for our business,” said Shaohui Chen, Meituan CFO and senior vice president, according to a recording of the earnings call.
In India inflation and sluggish manufacturing lead to slower economic growth
India’s economic growth slowed more than expected in the third quarter, driven by weaker performance in manufacturing and consumption, likely increasing pressure on the central bank to consider interest rate cuts.
Gross Domestic Product (GDP) grew by 5.4 percent in the July-September period year-on-year, marking the slowest growth in seven quarters and falling short of the 6.5 percent forecast in a Reuters poll. The previous quarter had seen a 6.7 percent growth.
Meanwhile, the Gross Value Added (GVA), a more stable measure of economic activity, grew by 5.6 percent, easing from a 6.8 percent increase in the previous quarter.
Manufacturing growth dropped sharply to 2.2 percent from 7 percent in the previous quarter. The mining sector also contributed to the slowdown, with the economy experiencing a bump in its post-pandemic recovery.
The slowdown is also being fueled by inflation, which is running at about 6 percent, reducing demand for goods, including soaps, shampoos, and cars, especially in urban areas. Private consumption rose by 6.0 percent from a year earlier, down from 7.4 percent in the previous quarter.
Despite the slowdown, government spending rose by 4.4 percent year-on-year in the third quarter, up from a contraction of 0.2 percent in the previous quarter. Agricultural output, supported by a good monsoon, performed better, rising by 3.5 percent compared to 2 percent in the previous quarter.
Indonesia, Canada ink comprehensive economic partnership
Indonesia and Canada on Monday signed a Comprehensive Economic Partnership Agreement (CEPA) that aims to strengthen economic ties between the two G20 members, three years after negotiations began.
The agreement will take effect in 2026 and was signed in Jakarta by trade ministers of both countries.
Indonesia’s trade minister, Budi Santoso, said Indonesia appreciated Canada’s support for its plan to prioritise its critical minerals sector, which was vital for its sustainable growth.
“Together, we advance sustainable critical mineral management, supporting Indonesia’s net zero target by 2060, and fostering Canadian investment while driving green growth in both nations,” he told a joint press conference.
Indonesia has rich deposits of tin, copper and bauxite, among others, and is the world’s largest source of nickel ore.
Under CEPA, Indonesia will see liberalisation of 90.5 percent of the total tariffs for goods entering Canada with a trade value of $1.4 billion.
Two-way trade between Indonesia and Canada was $3.4 billion last year, according to with Indonesia’s trade ministry. Canada has estimated bilateral trade at $5.1 billion in 2023.
Canada’s main exports to Indonesia were agriculture products fertilizers, while Indonesia mainly exported machinery and electrical machinery as well as garments and footwear.
Canada’s international trade minister, Mary Ng said the country’s cattle industry was also represented on the Jakarta visit and looking to play a part in President Prabowo Subianto’s signature programme to provide free school meals from next year.
Japan PM: no plan to revise joint boj statement
Japan’s government has no plans to revise a joint statement with the central bank that focused on pulling the economy out of deflation, Prime Minister Shigeru Ishiba said on Thursday.
The need to reverse excessive rises in the yen was shared with the public when former Prime Minister Shinzo Abe deployed his “Abenomics” stimulus policies in 2012-2013 that consisted of bold monetary easing, loose fiscal policy and structural reform, Ishiba told parliament.
“But what could have been appropriate policies at the time, if sustained, could cause side-effects,” he added.
Ishiba also said the government must scrutinise what the appropriate exchange-rate level for Japan’s economy could be. He did not elaborate on specific levels.
Malaysia: any US tariffs on Brics nations could impact semiconductor supply
Malaysia said on Thursday any attempt by the incoming Trump administration to impose tariffs on Brics countries for trying to create a new currency or use alternatives to the dollar could cause global semiconductor supply chain disruptions.
The Bric grouping of major emerging economies initially included Brazil, Russia, India and China, and has since expanded to take in other countries.
Malaysia has applied to be part of the bloc, which aims to challenge a world order dominated by Western economies, but has not yet been officially accepted as a member.
Trade minister Tengku Zafrul Aziz said Malaysia was closely monitoring developments after US President-elect Donald Trump said Brics members would face 100 percent tariffs unless they committed to not creating a new currency or supporting another currency that would replace the United States dollar.
Tengku Zafrul noted the United States was Malaysia’s third-biggest trade partner and US firms were the main investors in its semiconductor sector. Malaysia is a major hub which accounts for about 13 percent of global chip testing and packaging.
“As such, any move to impose a 100 percent tariff will only harm both parties which are depending on each other for efforts to prevent disruptions in the global supply chain,” he said in a parliamentary reply.
He added that while Brics countries have discussed reducing reliance on traditional trade currencies such as the USÂ dollar, there has been no official decision made on de-dollarisation efforts.
Prime Minister Nepal KP Sharma oli encourages business groups
Prime Minister of Nepal KP Sharma Oli encouraged business groups from Nepal and China to enhance collaboration. “Trade, commerce and economic relations between our two countries are now at a new level,” Oli said on Wednesday when addressing the Nepal-China Business Summit held in Beijing.
Oli also said that strong economic and trade ties between the two countries have also boosted overall bilateral relations.
“The business community in Nepal views Prime Minister Oli’s visit to China as a significant step forward in strengthening Nepal-China relations, particularly in the areas of trade, investment and infrastructure development,” Chandra Prasad Dhakal, President of Federation of Nepalese Chambers of Commerce & Industry (FNCCI), told the Global Times on Wednesday on the sidelines of the summit.
Among the agreements signed during this visit, two are directly related to economic cooperation, which is a promising development for the private sector. These agreements highlight the potential for increased collaboration in trade, investment and technical exchanges, said Dhakal.
“We aspire to see a robust Nepal-China economic partnership that enhances market access for Nepalese goods in China, encourages Chinese investment in Nepal’s priority sectors, and promotes technology transfer to improve competitiveness and productivity,” said Dhakal.