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Asian Economy: Overview, Growth & Development

ASIAN ECONOMY: OVERVIEW, GROWTH & DEVELOPMENT
Singapore economy to stay tepid in 2020; ‘significant uncertainties’ for trade-related sector: MAS

Singapore’s economy is likely to continue facing headwinds into 2020, seeing lacklustre activity over the next 18 months, said the Monetary Authority of Singapore (MAS) on Wednesday (Oct 30).

Growth will be uneven across industries, with “significant uncertainties” for the trade-related cluster, the central bank added in its twice-yearly macroeconomic review.

Part of this stems from higher volatility in the electronics-related industries. Semiconductor producers, for example, have been seen to draw down inventories to meet new orders instead of stepping up production in view of uncertain demand.

Reconfigurations of regional trade flows and supply chains could pose further unpredictability for Singapore, said MAS.

Economists said that even though a strong rebound is unlikely in the coming months, they see some light at the end of the tunnel.

Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said the baseline expectation appears to be slow growth persisting into 2020, with the biggest risks remaining the US-China trade, tech and currency tensions as well as dampened demand conditions.

But the Republic is likely to escape a technical recession– two consecutive quarters of quarterly decline – and full-year recession if global growth stabilises in the later part of next year, she told The Straits Times.

Philippine economy may fall short of target set by government

THOUGH the Philippine economy was projected to recover in the second half of 2019, economists say it will still fall below the target set by the government.

According to reports in The Manila Times, the government had targeted a 6 to 7 percent growth this year.

Union Bank of the Philippines (UnionBank) chief economist Ruben Carlo Asuncion said the country’s economic growth was expected to settle at 6.1 percent in the third quarter and 6.4 percent in the fourth.

“This is slightly higher than the 6.3 percent recorded in the comparative quarters of 2018,” he said, adding that it was also higher than the 5.5 percent in the second quarter.

He said state spending increased in the third quarter following efforts by the government, with expenditures jumping to P415.1 billion in September – the fastest growth for this year.

Asuncion said the country’s manufacturing performance and trade continued to drag in the July-to-September period, while the agricultural sector was slow due to delays in the implementation of benefits from the Rice Tariffication Law and the African swine fever.

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Japan retail sales raise most since 2014, but outlook murky

Japanese retail sales grew at the strongest pace in 5-1/2 years in September as consumers rushed to buy big-ticket items to beat a rise in the country’s sales tax, raising concerns spending could pull back sharply in the coming months.

The increase in national sales tax to 10percent from 8percent on Oct. 1 is seen as crucial for fixing the industrial world’s heaviest public debt at more than twice the size of Japan’s economy.

But some analysts worry the twice-delayed tax hike could tip the world’s third-largest economy into recession, underscoring the challenge for the central bank to sustain growth and accelerate inflation towards its 2percent inflation target.

Wednesday’s data is among key indicators to be scrutinized by the Bank of Japan, which holds its two-day policy review that ends on Thursday when it issues its quarterly projections of economy and prices.

Can India’s economy return to high growth?

While India’s GDP has fallen to a six-year low, the country’s economy has some areas of strength. Gaurav Dalmia, chairman of Dalmia Group Holdings, a holding company for business and financial assets, believes that if India can take hard decisions, “there is no reason why we can’t grow at 10percent.”

Dalmia has invested significantly in private equity and real estate, including sponsoring some top quartile funds. He was chosen as a Global Leader for Tomorrow by the World Economic Forum in 2000.

India is going through what you would call two big Schumpeterian shocks. In November 2016, we had demonetization. And then shortly thereafter, we had the goods and services tax regime. Both changed the world significantly for Indian businesses— more so for the small and medium enterprise sector.

 

Indonesia to play leadership role in sustainable maritime economy

During the 7th century, the Srivijaya Empire ruled a large swath of Southeast Asia from the Indonesian island of Sumatra. With thriving trade links extending as far as China, historians describe the period as a time when the archipelago’s maritime history flourished.

Recalling its past maritime glory, Indonesia— the world’s largest archipelagic nation — is ready to be a 21st century leader in the sustainable maritime economy through the Archipelagic and Island States (AIS) Forum.

The AIS Forum, which Indonesia created in 2018 with support from the United Nations Development Program (UNDP), brings together both developed and developing nations, which face similar challenges caused by climate change.

They are united in a desire to seek innovative solutions and new partnerships to secure long term sustainable development for their people. For resource-rich Indonesia, the AIS Forum is a perfect vehicle to achieve greater prosperity through the development of a sustainable maritime economy and international cooperation.

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Britain’s black economy draws Vietnamese migrants

The deaths of 39 migrants in the back of a refrigerated truck near London last week has focused a spotlight on the lives of those who risk everything to earn a better living in Britain.

Many of the victims are believed to have traveled from Vietnam. Tamsin Barber, an expert on the Vietnamese diaspora in Britain at Oxford Brookes University, says many migrants are willing to take huge risks.

“They’re doing that because they know that when they get to the UK, the likelihood is that they’re going to be able to find work in the cannabis industry, where they might be able to earn large amounts of money in a short period of time, paying back their debts, the debts to the smugglers, and then eventually being able to pay send remittances back to their family,” Barber said.

Thai exports will suffer from trump labour rights decision

The Thai export sector will suffer another blow after the US President Donald Trump announced on Friday the suspension of 1.3 billion dollars worth of duty-free trade for certain Thai goods, claiming Thailand has not taken steps to protect the labor rights.

In a letter to US House of Representatives Speaker Nancy Pelosi and Vice President Mike Pence, Trump said he had suspended the duty-free treatment because Thailand had not taken steps to “afford workers in Thailand internationally recognized worker rights.”

The US Trade Representative (USTR)’s’s office said the move amounted to a suspension of 1.3 billion dollars in trade preferences under the Generalized System of Preferences (GSP) program. At present, the GSP covers around 4.5 billion dollars of Thai exports.

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