Source: Yahoo! News Singapore
LONDON (AFP) - - The US economy shrank by 0.5 percent in the third quarter, official data showed on Tuesday as Britain edged ever closer to a recession and the IMF's top economist warned of a second Great Depression.
The abrupt contraction of gross domestic product (GDP) in the world's largest economy, confirming a first estimate, was seen by analysts as marking the start of a steep downturn for the United States after GPD growth of 2.8 percent in the second quarter.
Britain's economy also shrank by 0.6 percent in the three months to September compared to the previous quarter, against a previous estimate of 0.5-percent contraction, the Office for National Statistics said.
Britain and the United States will be in recession if their economies contract again in the fourth quarter, according to the traditional definition of a recession as two consecutive quarters of negative economic growth.
The IMF's top economist, Olivier Blanchard, warned governments around the world should boost domestic demand in order to avoid a Great Depression similar to the downturn that shook the world in the 1930s.
"Consumer and business confidence indexes have never fallen so far since they began. The coming months will be very bad," Blanchard said in an interview with the French newspaper Le Monde.
"It is imperative to stifle this loss of confidence, to restart household consumption, if we want to prevent this recession developing into a Great Depression," he added.
New data out in France offered some respite from the gloom, however, showing that household consumption of manufactured goods -- a key growth indicator -- rallied 0.3 percent last month after slumping in October.
"It is a first small Christmas present for the French economy," said Alexander Law, an economist at the Xerfi research centre in Paris.
But in Italy, retail sales figures went down 0.3 percent in October.
Denmark's economy contracted 0.4 percent in the third quarter and the Dutch economy showed zero growth, official data showed. Finland's unemployment rate rose to 6.0 percent in November from 5.8 percent a month earlier.
Elsewhere in Europe, the Polish central bank cut its key lending rate by 75 basis points to 5.00 percent, following a further cut in interest rates in Hungary on Monday by half a percentage to 10.0 percent.
The European Central Bank issued some heartening pre-Christmas data showing that the eurozone's current account deficit narrowed to 6.4 billion euros (9.0 billion dollars) in October from 8.8 billion euros in September.
News of weakening growth sent the British pound sliding under 1.0550 euros, nearing a record low of 1.0463 reached last week, as dealers bet on more interest rate cuts from the Bank of England and forecast parity with the euro.
The dollar also drifted lower against the euro and the yen in muted trading conditions ahead of the Christmas holidays. In late morning trading, the euro firmed to 1.3959 dollars, from 1.3944 dollars in New York late on Monday.
European stocks rose in early afternoon trading after the announcement of US GDP figures, with the FTSE 100 index in London up 0.80 percent, the Frankfurt Dax up 0.89 percent and the CAC 40 in Paris up 0.51 percent.
Asian stocks closed mostly down, with the Hong Kong stock market shedding 2.8 percent and Shanghai sinking 4.55 percent as a smaller-than-expected Chinese interest rate cut failed to boost market sentiment.
Oil prices also fell further to below 40 dollars a barrel in Asian trade, with New York's main futures contract, light sweet crude for delivery in February, shedding eight cents to 39.83 dollars a barrel.
The contract had fallen to 39.91 dollars in New York on Monday.
Energy analysts were also keeping a close eye on a meeting of key world gas exporters in Moscow amid fears of a "gas OPEC" similar to the Vienna-based oil cartel that could raise natural gas prices.
In a keynote speech, Russian Prime Minister Vladimir Putin told the conference that the "era of cheap gas" for consumers was coming to an end because of the expense of developing new fields.
Venezuelan Energy Minister Rafael Ramirez said: "We see in this forum an opportunity to build a solid organisation, which has in its foundation the same principles that gave birth to OPEC."
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Wednesday, December 24, 2008
Thursday, December 18, 2008
World Bank head sees worldwide problem in 2009
Source: Yahoo! News Singapore
AFP - 50 minutes agoSINGAPORE, Dec 18, 2008 (AFP) - The president of the World Bank warned Thursday of a worldwide struggle in the first half of 2009 as a deepening global economic crisis hits Asian countries.
Robert Zoellick also cautioned against a return to trade protectionism that could worsen the crisis.
"I am afraid that the first six months of 2009 are going to be a problem worldwide, including in Asia and including in Southeast Asia," Zoellick told a news conference during a visit to Singapore.
The Bank said in a report last week that the Asia-Pacific region remained reasonably well-placed to weather the global slowdown but will see growth ease to 5.3 percent in 2009 from 7.0 percent this year.
It said the global economy would expand a mere 0.9 percent next year and world trade volume would fall 2.1 percent, the first drop in 26 years.
"In the discussions that I have had with people around the world, no one has a very good prediction for the length and depth of this crisis," Zoellick said.
Government monetary and fiscal policy, as well as open trade systems, will determine whether the situation can improve later next year, he said.
"Particularly I am concerned about the rising dangers of protectionism," he added, describing as "unfortunate" the difficulties encountered during the Doha Round of talks on a new global trade pact.
"The international system needs to stay on offence on trade because protectionist forces will raise their heads," he said.
The so-called Doha talks started at the end of 2001 in the Qatari capital. They aim to boost international commerce by removing trade barriers and subsidies, but a deal has proved elusive.
Developing countries, including China and India, want the industrialised world to scrap agricultural subsidies, while Western powers are seeking greater access for their products in emerging markets.
"Whatever parties can do to try to get the Doha Round back on track would be vitally important," Zoellick said later at a dialogue session with students from a local university.
"This financial and economic and unemployment problem is serious enough.
"If we start to trigger a round of protectionism, as you saw in the 1930s, it could deepen (the global crisis)."
Pascal Lamy, the head of the World Trade Organisation (WTO), last Friday scrapped plans to hold a ministerial meeting on the trade talks, citing the "unacceptably high" risk of failure and dashing hopes that the long-delayed global trade pact could be clinched this month.
The World Bank, which provides financial and technical assistance to developing countries, said last week that healthy growth in recent years had left major economies such as China in good shape to fight the global crisis with macroeconomic measures.
But it said "in the near term, downside risks are substantial" due to recessions in developed markets.
Zoellick, who was recently in China, said that country's leaders expected to see a decline in growth because of the global slowdown but that they were struck by the sharpness and the depth of the fall in exports.
The World Bank forecast 7.5 percent growth for China next year, which would be its slowest in nearly two decades.
Zoellick was in Singapore to sign a memorandum of understanding with the city-state to strengthen and expand collaboration on development assistance.
"Singapore and the World Bank Group intend to play a positive and growing role in helping countries tackle critical policy challenges especially in the area of urban management," said a statement from Singapore's foreign ministry
AFP - 50 minutes agoSINGAPORE, Dec 18, 2008 (AFP) - The president of the World Bank warned Thursday of a worldwide struggle in the first half of 2009 as a deepening global economic crisis hits Asian countries.
Robert Zoellick also cautioned against a return to trade protectionism that could worsen the crisis.
"I am afraid that the first six months of 2009 are going to be a problem worldwide, including in Asia and including in Southeast Asia," Zoellick told a news conference during a visit to Singapore.
The Bank said in a report last week that the Asia-Pacific region remained reasonably well-placed to weather the global slowdown but will see growth ease to 5.3 percent in 2009 from 7.0 percent this year.
It said the global economy would expand a mere 0.9 percent next year and world trade volume would fall 2.1 percent, the first drop in 26 years.
"In the discussions that I have had with people around the world, no one has a very good prediction for the length and depth of this crisis," Zoellick said.
Government monetary and fiscal policy, as well as open trade systems, will determine whether the situation can improve later next year, he said.
"Particularly I am concerned about the rising dangers of protectionism," he added, describing as "unfortunate" the difficulties encountered during the Doha Round of talks on a new global trade pact.
"The international system needs to stay on offence on trade because protectionist forces will raise their heads," he said.
The so-called Doha talks started at the end of 2001 in the Qatari capital. They aim to boost international commerce by removing trade barriers and subsidies, but a deal has proved elusive.
Developing countries, including China and India, want the industrialised world to scrap agricultural subsidies, while Western powers are seeking greater access for their products in emerging markets.
"Whatever parties can do to try to get the Doha Round back on track would be vitally important," Zoellick said later at a dialogue session with students from a local university.
"This financial and economic and unemployment problem is serious enough.
"If we start to trigger a round of protectionism, as you saw in the 1930s, it could deepen (the global crisis)."
Pascal Lamy, the head of the World Trade Organisation (WTO), last Friday scrapped plans to hold a ministerial meeting on the trade talks, citing the "unacceptably high" risk of failure and dashing hopes that the long-delayed global trade pact could be clinched this month.
The World Bank, which provides financial and technical assistance to developing countries, said last week that healthy growth in recent years had left major economies such as China in good shape to fight the global crisis with macroeconomic measures.
But it said "in the near term, downside risks are substantial" due to recessions in developed markets.
Zoellick, who was recently in China, said that country's leaders expected to see a decline in growth because of the global slowdown but that they were struck by the sharpness and the depth of the fall in exports.
The World Bank forecast 7.5 percent growth for China next year, which would be its slowest in nearly two decades.
Zoellick was in Singapore to sign a memorandum of understanding with the city-state to strengthen and expand collaboration on development assistance.
"Singapore and the World Bank Group intend to play a positive and growing role in helping countries tackle critical policy challenges especially in the area of urban management," said a statement from Singapore's foreign ministry
Saturday, December 6, 2008
Singapore may face years of slow growth after recession
Singapore may face years of slow growth after recession Reuters - Saturday, December 6By Neil Chatterjee and Kevin Lim
SINGAPORE, Dec 5 - Singapore's economy, already in recession, may shrink in 2009 and face slow growth for years to come, the country's prime minister said, as the export-dependent city-state is hit by the fallout from the world economic crisis.
Lee Hsien Loong, at a lunch hosted by Singapore's Foreign Correspondents Association, said it was not government policy to weaken its currency -- a move that could help exporters but hurt the country's standing as place for investment.
"Singapore must be prepared for several years of slow growth," he said. "Even the most pessismistic bears did not anticipate the consequences of the bubbles," Lee added, referring to U.S. subprime housing woes and global trade imbalances.
The central bank, which sets monetary policy by managing the Singapore dollar against a secret basket of currencies, in October switched from allowing a gradual rise in the currency to a neutral stance of zero appreciation.
Some commentators expect the central bank to ease policy further by letting the currency weaken ahead of its next scheduled review in April.
Lee, the son of Singapore's founding father and former Prime Minister Lee Kuan Yew, is facing his biggest test since taking office four years ago, with the country's top trading partners the United States and Europe in recession and growth in Asian neighbours slowing.
Lee said policies to boost the economy would take effect immediately after being announced in an expansionary January budget. The government would partly rely on construction to help growth with project costs coming down, he said.
"It makes sense for us to take advantage of that," Lee said. "The budget emphasis will be on jobs." He expects unemployment to rise, particularly in manufacturing, which accounts for about a quarter of the economy.
Last month, the government pledged to spend S$2.3 billion to help firms get credit and said it would run a larger budget deficit to support an economy that it said could shrink 1 percent in 2009 and at best would expand 2 percent.
BANKING SECRECY
The government is trying to diversify away from manufacturing into service industries such as tourism and finance.
Singapore's banks have not suffered huge writedowns on risky debts unlike peers in the United States and Europe, though top bank DBS Group said last month it would cut 900 jobs after suffering a 38 percent drop in quarterly profit.
Lee said Singapore may face political pressure from the European Union and the United States over its role as a financial centre for rich foreigners, following a landmark deal by offshore haven Liechtenstein with the United States to drop bank secrecy in cases of tax evasion.
"I expect Singapore to come under pressure too," he said in response to a question on whether pressure on countries like Liechtenstein and Switzerland will help private banks based in Singapore.
The government has previously denied suggestions that the country is a tax haven. It has strict bank secrecy laws and has been promoting itself as a rival financial centre to Hong Kong to attract banks such as UBS, Credit Suisse and Citigroup to manage money for rich clients.
SINGAPORE, Dec 5 - Singapore's economy, already in recession, may shrink in 2009 and face slow growth for years to come, the country's prime minister said, as the export-dependent city-state is hit by the fallout from the world economic crisis.
Lee Hsien Loong, at a lunch hosted by Singapore's Foreign Correspondents Association, said it was not government policy to weaken its currency -- a move that could help exporters but hurt the country's standing as place for investment.
"Singapore must be prepared for several years of slow growth," he said. "Even the most pessismistic bears did not anticipate the consequences of the bubbles," Lee added, referring to U.S. subprime housing woes and global trade imbalances.
The central bank, which sets monetary policy by managing the Singapore dollar against a secret basket of currencies, in October switched from allowing a gradual rise in the currency to a neutral stance of zero appreciation.
Some commentators expect the central bank to ease policy further by letting the currency weaken ahead of its next scheduled review in April.
Lee, the son of Singapore's founding father and former Prime Minister Lee Kuan Yew, is facing his biggest test since taking office four years ago, with the country's top trading partners the United States and Europe in recession and growth in Asian neighbours slowing.
Lee said policies to boost the economy would take effect immediately after being announced in an expansionary January budget. The government would partly rely on construction to help growth with project costs coming down, he said.
"It makes sense for us to take advantage of that," Lee said. "The budget emphasis will be on jobs." He expects unemployment to rise, particularly in manufacturing, which accounts for about a quarter of the economy.
Last month, the government pledged to spend S$2.3 billion to help firms get credit and said it would run a larger budget deficit to support an economy that it said could shrink 1 percent in 2009 and at best would expand 2 percent.
BANKING SECRECY
The government is trying to diversify away from manufacturing into service industries such as tourism and finance.
Singapore's banks have not suffered huge writedowns on risky debts unlike peers in the United States and Europe, though top bank DBS Group
Lee said Singapore may face political pressure from the European Union and the United States over its role as a financial centre for rich foreigners, following a landmark deal by offshore haven Liechtenstein with the United States to drop bank secrecy in cases of tax evasion.
"I expect Singapore to come under pressure too," he said in response to a question on whether pressure on countries like Liechtenstein and Switzerland will help private banks based in Singapore.
The government has previously denied suggestions that the country is a tax haven. It has strict bank secrecy laws and has been promoting itself as a rival financial centre to Hong Kong to attract banks such as UBS
Wednesday, December 3, 2008
CapitaLand to cut staff salaries between 3-20 pct
Source: Yahoo news.singapore
Reuters - 2 hours 8 minutes agoSINGAPORE, Dec 3 - Southeast Asia's largest developer, CapitaLand, said on Wednesday it will cut staff pay between three to 20 percent in light of a slowing domestic economy.
CapitaLand said in a statement that the firm-wide measures will affect mostly management and executive level employees, with its chief executive, Liew Mun Leong, bearing the maximum cut of 20 percent.
The cuts will take effect in January 2009.
"We felt that the proactive measures demonstrate the Groups disciplined capital management and prudence during these global financial and economic uncertainties," Liew said.
Some Singapore firms have started laying off staff and cutting salaries in light of the tough economic conditions. State investor Temasek Holdings [TEM.UL] said last month it will cut staff pay between 15 to 25 percent while DBS Group and Neptune Orient Lines said they will be cutting jobs.
Reuters - 2 hours 8 minutes agoSINGAPORE, Dec 3 - Southeast Asia's largest developer, CapitaLand
CapitaLand said in a statement that the firm-wide measures will affect mostly management and executive level employees, with its chief executive, Liew Mun Leong, bearing the maximum cut of 20 percent.
The cuts will take effect in January 2009.
"We felt that the proactive measures demonstrate the Groups disciplined capital management and prudence during these global financial and economic uncertainties," Liew said.
Some Singapore firms have started laying off staff and cutting salaries in light of the tough economic conditions. State investor Temasek Holdings [TEM.UL] said last month it will cut staff pay between 15 to 25 percent while DBS Group
Wednesday, October 29, 2008
Singapore's economy remains weak
Quoted from Yahoo!
SINGAPORE, Oct 28, 2008 (AFP) - Singapore's economy, which is already in a technical recession, will remain weak in 2009 on projections the global economic outlook will deteriorate further, the central bank said Tuesday.
As a financial crisis evolves to impact economic activity worldwide, the city-state is likely to be hammered given its heavy exposure to external demand, the Monetary Authority (MAS) said in its Macro Economic Review.
"Looking ahead, the outlook for the global economy has deteriorated amidst heightened risk aversion and deleveraging in the financial sector," MAS said.
As a small and open trading economy, Singapore is vulnerable to any downturn in its major export markets such as the United States, Europe, China, India and Japan.
"The risks to external demand conditions continue to be on the downside, and a more severe global slowdown cannot be discounted," the MAS warned.
"Taking all these factors into account GDP growth is expected to be around 3.0 percent in 2008, and the economy will continue to grow below its potential rate into 2009," the MAS said.
Prospects for a recovery late next year hinge on the performance of key global economies, it said.
Singapore this month cut its economic growth forecast for 2008 to 3.0 percent from between 4.0 and 5.0 percent after the economy slipped into a technical recession, described as two consecutive quarters of negative growth.
Real gross domestic product (GDP) declined by 6.3 percent in the third quarter after contracting 5.7 percent in the previous quarter, according to preliminary government data.
The MAS said Singapore's financial sector will suffer from a direct impact, while weakening consumer sentiment will affect retail trade and the property market.
Other segments of the econonomy like manufacturing and tourism will suffer from falling external demand, it said.
-----
Quoted from Yahoo!
SINGAPORE, Oct 28 - Singapore's economy will grow below a potential rate of 4-6 percent in 2009 as the impact from a global financial crisis spreads across the whole economy and drags on previously resilient sectors such as manufacturing, the central bank said.
The Monetary Authority of Singapore said in its twice-yearly macroeconomic review report on Tuesday that the risks faced by Singapore's trade-dependent economy had shifted to slowing growth from rising prices, because the economic downturn has helped tame inflation.
It said it was ready to dampen excess volatility in Singapore's nominal effective exchange rate band, which it uses to set monetary policy by adjusting the strength of the Singapore dollar against a basket of currencies.
It said it had also temporarily increased the level of liquidity in the banking system.
"Growth will likely remain below trend in 2009," the central bank said on Tuesday. "Concomitantly, external and domestic inflationary pressures are likely to ease."
The government has said previously that the potential trend growth in the medium term is between 4 to 6 percent.
The central bank said prospects of Singapore's economy recovering in the latter half of 2009 will depend significantly on growth in the United States, Europe, Japan, and other regional economies.
Singapore's economy fell into a recession in the July-to-September period, the country's first recession since 2002, as manufacturing activity and exports slumped.
The central bank said Singapore's economy is expected to grow about 3 percent this year, with inflation hitting 6-7 percent in 2008 before easing to between 2.5-3.5 percent in 2009.
However, the central bank warned it will take time for the decline in prices to be reflected in the consumer price index.
"Headline inflation rates could be sticky downwards for a while as the prices of some goods and services continue to react to past increases," it said.
The central bank said Singapore's economy appeared to be experiencing the "second phase of the impact from global shocks".
"There are emerging signs that the adverse effects had spread from the vulnerable industries to segments that had previously been considered relatively resilient."
The recession prompted Singapore's central bank to ease monetary policy in October for the first time since 2003.
The central bank said on Tuesday it loosened policy in October because of "dissipating inflationary pressures and increased downside risks to growth".
SINGAPORE, Oct 28, 2008 (AFP) - Singapore's economy, which is already in a technical recession, will remain weak in 2009 on projections the global economic outlook will deteriorate further, the central bank said Tuesday.
As a financial crisis evolves to impact economic activity worldwide, the city-state is likely to be hammered given its heavy exposure to external demand, the Monetary Authority (MAS) said in its Macro Economic Review.
"Looking ahead, the outlook for the global economy has deteriorated amidst heightened risk aversion and deleveraging in the financial sector," MAS said.
As a small and open trading economy, Singapore is vulnerable to any downturn in its major export markets such as the United States, Europe, China, India and Japan.
"The risks to external demand conditions continue to be on the downside, and a more severe global slowdown cannot be discounted," the MAS warned.
"Taking all these factors into account GDP growth is expected to be around 3.0 percent in 2008, and the economy will continue to grow below its potential rate into 2009," the MAS said.
Prospects for a recovery late next year hinge on the performance of key global economies, it said.
Singapore this month cut its economic growth forecast for 2008 to 3.0 percent from between 4.0 and 5.0 percent after the economy slipped into a technical recession, described as two consecutive quarters of negative growth.
Real gross domestic product (GDP) declined by 6.3 percent in the third quarter after contracting 5.7 percent in the previous quarter, according to preliminary government data.
The MAS said Singapore's financial sector will suffer from a direct impact, while weakening consumer sentiment will affect retail trade and the property market.
Other segments of the econonomy like manufacturing and tourism will suffer from falling external demand, it said.
-----
Quoted from Yahoo!
SINGAPORE, Oct 28 - Singapore's economy will grow below a potential rate of 4-6 percent in 2009 as the impact from a global financial crisis spreads across the whole economy and drags on previously resilient sectors such as manufacturing, the central bank said.
The Monetary Authority of Singapore said in its twice-yearly macroeconomic review report on Tuesday that the risks faced by Singapore's trade-dependent economy had shifted to slowing growth from rising prices, because the economic downturn has helped tame inflation.
It said it was ready to dampen excess volatility in Singapore's nominal effective exchange rate band, which it uses to set monetary policy by adjusting the strength of the Singapore dollar
It said it had also temporarily increased the level of liquidity in the banking system.
"Growth will likely remain below trend in 2009," the central bank said on Tuesday. "Concomitantly, external and domestic inflationary pressures are likely to ease."
The government has said previously that the potential trend growth in the medium term is between 4 to 6 percent.
The central bank said prospects of Singapore's economy recovering in the latter half of 2009 will depend significantly on growth in the United States, Europe, Japan, and other regional economies.
Singapore's economy fell into a recession in the July-to-September period, the country's first recession since 2002, as manufacturing activity and exports slumped.
The central bank said Singapore's economy is expected to grow about 3 percent this year, with inflation hitting 6-7 percent in 2008 before easing to between 2.5-3.5 percent in 2009.
However, the central bank warned it will take time for the decline in prices to be reflected in the consumer price index.
"Headline inflation rates could be sticky downwards for a while as the prices of some goods and services continue to react to past increases," it said.
The central bank said Singapore's economy appeared to be experiencing the "second phase of the impact from global shocks".
"There are emerging signs that the adverse effects had spread from the vulnerable industries to segments that had previously been considered relatively resilient."
The recession prompted Singapore's central bank to ease monetary policy in October for the first time since 2003.
The central bank said on Tuesday it loosened policy in October because of "dissipating inflationary pressures and increased downside risks to growth".
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