"Private-sector activity continued to be the
main driver of growth in the three months to June," she added.
Domestic demand rose 5.6 per cent, underpinned by
strong private spending and a continued increase in private investment
On the supply side, the services sector maintained
its strong performance with 5.4 per cent expansion, she said.
Zeti said slower growth was experienced in the
manufacturing sector, with 3.2 per cent expansion, while the output in
the mining sector declined 1.6 per cent due to the shutdown of oil
fields and plants for maintenance.
Growth in the construction sector continued to
decline at a moderate rate of 2.0 per cent.
The central bank chief warned that full-year
inflation could be higher than the projected 2.8 per cent if oil
prices increased more than expected.
Zeti also said that despite higher
petroleum-related expenditures, improved revenue collection contained
the fiscal deficit at 2.7 billion ringgit or 2.3 per cent of GDP in
the second quarter.
Malaysia's external position remained strong with
the trade balance recording a large surplus of 22.9 billion ringgit,
Gross exports grew at 10.8 per cent, supported by
robust growth in minerals and reinforced by expansion in exports of
manufactured goods and agricultural commodities.
Portfolio investment recorded a higher net inflow
of 4.5 billion ringgit against 2.8 billion in the preceding quarter,
mainly reflecting sustained foreign interest particularly in debt
securities, she said.
VENEZUELA SIGNS JAMAICA OIL DEAL
Venezuela's President Hugo Chavez has signed a deal
with Jamaica to supply it with oil at preferential rates.
Mr Chavez said his country, the world's fifth
largest oil producer, was meeting the "call of conscience"
by supplying cheap oil at a time of rising prices.
The agreement is part of a regional Petrocaribe
initiative - proposed by Mr Chavez - to which most of the Caribbean
countries have signed up.
Jamaica is the first to formalise its participation
in the project.
Venezuela has been discussing similar deals with
many countries in Latin America and the Caribbean in recent months.
Under the agreement, Venezuela will provide oil at
a discounted rate of $40 (£22) a barrel, compared to more than $60
(£33) on the world market, Jamaica's Prime Minister PJ Patterson
The deal will initially involve about 22,000
barrels a day, for which Jamaica will be able to pay Venezuela in
goods and services as well as through low interest loans, he added.
The prime minister said: "Much has been
accomplished by strengthening the relationship between Venezuela and
Mr Chavez responded: "Don't thank us. It is
the call of conscience."
His visit to Jamaica's resort city of Montego Bay
followed a trip to Cuba, during which he and Cuban leader Fidel Castro
reaffirmed their countries' joint commitment to socialism.
The Jamaica agreement represents only a tiny
proportion of the 3.1 million barrels produced by Venezuela each day.
The Petrocaribe initiative to bring cheaper oil to
the region was signed at a regional summit in the Venezuelan city
Puerto La Cruz in June.
Leaders from Caribbean nations joined the venture,
with only two countries, Barbados and Trinidad and Tobago, declining
to sign the deal.
Critics have said Mr Chavez is using Venezuela's
oil to secure diplomatic influence in the Caribbean.
INDONESIA TO BOOST NON-OIL EXPORTS
The Indonesian government has encouraged local
exporters to build global brands and bring about added-value to their
products to increase competitiveness to boost the national non-oil
"This year the National Agency for Export
Development (BPEN) has started thinking of Indonesia not facing
competition and relying merely on low prices," special staff
member of the Trade Minister for export development Rheinald Kasali
told copper handicraftsmen under the guidance of the Dharma Bhakti
Astra Foundation (YDBA) at an exhibition here on Tuesday night.
At the opening of the copper handicraft exhibition
being held from August 23 to 31, 2005, he said that starting this year
BPEN is encouraging exporters to build brands in the international
world and asked national businessmen to start developing added-value
for their export commodities.
"Building a brand is very important. It is not
only like giving a name, but creating a positive perspective in the
international world," Rheinald, also known as an expert in
management and marketing, said.
He said that building a brand does not need much
money, and is proportional with the line of business being undertaken.
If this is done seriously, he added, the image of the brand will be
created in five years.
IMF WARNS OF OIL-LINKED INFLATION IN ASIA
Robust energy demand from Asia will help keep world
oil prices high and this could result in slower economic growth in the
region, the International Monetary Fund (IMF) chief said on Thursday.
IMF managing director Rodrigo Rato said Asia could
expect to maintain its solid economic performance provided authorities
kept a tight watch on monetary policy to prevent oil-linked inflation
from choking growth prospects.
"The growth in Asia has been remarkable,"
the former Spanish finance minister said in a video conference with
Asian journalists from Washington ahead of his trip to the region next
"There are risks of course and the most
important risk is, at this time for Asia."
"We have seen that the impact of oil prices
has been mild at this moment but we believe if the high oil prices
persist and we believe that they will, Asian growth could be
NIGERIA EYES $5BN FDI A YEAR
Nigeria hopes to more than double foreign direct
investment to $5 billion a year thanks to investor friendly policies
and a concerted government effort to court foreign business
executives, an official said on Wednesday.
Mustafa Bello, head of the Nigerian Investment
Promotion Commission, told Reuters a crop of tax incentives plus a new
presidential committee that woos foreign CEOs would boost investment
in Africa's most populous nation.
"As we improve policies we are attracting more
investment," Bello said on the sidelines of a Nigeria-South
African investment conference in Johannesburg.
"We should be able to do $5 billion a year,
and after we open up the GSM (mobile phone) market further that will
help us fast-track (investment)."
Nigeria attracted about $2 billion in foreign
direct investment last year, with most going to its key oil sector,
and delegates at the conference said this must improve to help boost
economic growth and tackle poverty.
US DURABLE GOODS ORDERS SLIDE 4.9PC
Orders for US-made durable goods tumbled 4.9 per
cent in July, marking the biggest drop in 18 months, the Commerce
Department said on last Wednesday.
The drop in big-ticket items expected to last three
years or more surprised analysts, who on average had been expecting a
1.5 per cent decline following a revised 1.9pc increase in June.
Transportation orders led the way in July, plunging
8.6 per cent after falling 1.6 per cent in June.
Excluding the often-volatile transportation goods
category, July's new orders fell 3.2 per cent, almost reversing a 3.6
per cent rise in June. Excluding defence, total orders fell 4.5 per
The report, a gauge of strength in manufacturing,
tends to be volatile from month to month, so economists prefer to
focus on longer trends spanning a quarter or a year.
Year-to-date shipments — which feed directly into
calculations of gross domestic product — are up six per cent.
Year-to-date durable goods orders are up 6.2 per cent from a year ago.
OIL AT RECORD $68 AS DEMAND SOARS
Oil prices hit a record $68 a barrel on Thursday
after the US reported a fall in gasoline stocks, while China said its
crude imports had risen sharply.
Fears that tropical storm Katrina might hit
production in the Gulf of Mexico also pushed the cost of oil higher.
US light crude touched $68 a barrel in Asian trade
before finishing the day at $67.49. London's Brent crude touched
$66.56 before closing at $66.27.
Demand from the US, China and India is expected to
keep oil prices high.
US stocks of gasoline fell by 3.2 million barrels
last week to 194.9 million barrels, the US Department of Energy said
on Wednesday - 7% below 2004 levels.
CORUS PROFITS SHINE AFTER REVAMP
A restructuring drive at Corus has helped the
Anglo-Dutch steelmaker more than double its profits.
Pre-tax profits at the firm surged to £435m
($785m) for the first six months of the year, compared to £156m at
the same time last year.
At least 35% of the improvement was a result of its
"restoring success" shake-up, Corus said.
EU APPROVES $25BN HEALTHCARE DEAL
The European Commission has approved Johnson &
Johnson's $25.4bn (£14bn) takeover of rival Guidant, the largest ever
deal in the medical device sector.
In doing so, Brussels ruled that the US firm must
sell a number of businesses to ensure competition was not reduced in
certain product areas.
Guidant makes cardio-vascular devices such as
defibrillators and pacemakers.
Johnson, best known for its baby products, hopes
Guidant will broaden its business beyond drugs sales.
Like other leading pharmaceutical firms, Johnson -
based in New Jersey - is facing the expiry of patents on several of
The launch of cheaper, generic versions of drugs
has eaten into the revenues of leading drug companies, forcing them to
The $25.4bn acquisition of Guidant, whose
headquarters is in Indiana, was first announced in December.
GERMAN BUSINESS CONFIDENCE FALLS
German business confidence fell unexpectedly in
August ahead of an expected election in September, the Ifo research
Its main business climate index fell to 94.6 from
95.0 in July, its first decline since May.
The index is based on a monthly survey of 7,000
firms. A ZEW report earlier in the week gave the highest business
confidence figure since March.
"Companies are a little disturbed ahead of the
election," Ifo said.
Also on Thursday, German inflation slowed to 0.1%
in August, making an annual rate of 1.9% despite the rise in energy
The Ifo's survey's August figure was below the
mid-range forecast of 95.2 in a Reuters poll of 41 economists.
Its measure of current business conditions dropped
to 93.8 from 94.9 but its indicator of expectations for the next six
months rose to 95.4 from an upwardly revised 95.1.
Germany is facing a September general election in
which economic anxieties are expected to play a major role.
RENTOKIL HIT BY DROP IN PROFITS
Hygiene-to-security group Rentokil has announced
plans to sell off its conference and training business as it unveiled
a drop in first half profits.
The group revealed that pre-tax profits before
one-offs for the six months to 30 June fell 20% to £135.4m compared
to the same period last year.
LOSSES TRIPLE FOR SWISS AIRLINE
Losses at Swiss International Airlines have tripled
as sky-high fuel prices hurt its finances.
Its loss for the six months to June 2005 was 89m
Swiss francs (£39.22m; $70.58m), up from 33m Swiss francs a year ago.
IMF WARNING OVER IRAQ'S RECOVERY
Iraq faces "daunting challenges" as it
struggles to rebuild its battered economy, the International Monetary
Fund has warned.
The violent insurgency and political uncertainties
pose "major risks" to Iraq's economic recovery, the IMF
In its first review of the country in 25 years, the
IMF called for reforms in Iraq's oil and finance industries.
The IMF report came as Iraqi lawmakers failed to
meet a deadline to agree a new constitution for the country.
Iraq's parliament agreed on Tuesday to extend the
deadline until 22 August to enable the country's disparate sides to
Directors at the Washington-based IMF commended
Iraq's authorities for "maintaining a degree of macroeconomic
stability under extremely difficult circumstances".
TURKEY APPROVES STATE PHONE SALE
Turkish ministers have approved the $6.55bn
(£3.6bn) sale of a stake in state telecoms firm Turk Telekom to a
group led by Saudi-based Oger Telecom.
The disposal of the 55% stake, the largest ever
sale of a Turkish public asset, marks the end of a high-profile but
fraught privatisation process.
The sale was first mooted in 2001 but the process
only got underway in June following lengthy legal challenges. Turk
Telekom has 19 million subscribers and dominates Turkey's landline
US-CHINA ON VERGE OF TEXTILE DEAL
US negotiators say they are close to a textile
trade deal with China, despite two days of talks ending without
agreement between the countries.
Officials were optimistic that a deal could be
reached after one more session of talks due in China later this month.
Chinese clothing exports to the US are limited
under special World Trade Organization (WTO) rules amid claims they
are damaging the US textile trade. However, retailers warn tough new
limits may push up clothing costs.