Indonesia's economy grew at its fastest pace since 2008 in the first quarter of 2010, expanding 5.7% year-over-year driven by increased household spending, business investment, and exports. This exceeded economists' median growth forecast of 5.78% and reversed the previous quarter's contraction, showing Indonesia's economic recovery remains on track. Strong growth, stable inflation, and improved politics are expected to foster a better investment environment going forward.
In this issue of Economy Matters, we analyse the recent Fed rate hike and Euro Zone economic prospects, in the section on Global Trends. We have covered data trends in GDP, IIP, Inflation, Monetary Policy and Trade in the Domestic Trends section. Find out the results of 2QFY16 In Corporate Performance section. Taxation section covers the views of Sumit Dutt Mazumder, former Chairman of CBEC on GST. The Sectoral Spotlight for this issue is on Financial Conditions Index for 3QFY16. Read Focus of the Month, to know about ‘Skilling India’, wherein experts from diverse areas present their views.
"Highlights":
Wage growth continues
Private consumption behind GDP growth
Situation in lending is improving
"In Focus":
The right moment to put the budget in order. Press conference of the Governor of Latvijas Banka (summary) – Ilmārs Rimšēvičs
Dear Investors,
September saw a spillover of the previous month’s equity
market correction. The main reason for this was the continuing
bleak global events, which also negated domestic macro greenshoots to a large extent. In the West, the possibility of a US Fed
rate hike lingers, keeping investors globally on their toes.
Amidst this global weakness, uncertainties of global markets
with respect to the Euro have reduced after Alexis Tsipras’
Syriza party returned to power once again in Greece, this time
with a majority. The Chinese government is also taking
initiatives like tightening trading rules on forex and stock
market to stabilize their economy. The slowdown in China in a
way has been India’s gain, which has led to India emerging as
the top destination for FDI investments, attracting $30 billion
by the end of June 2015.
Closer home, better looking green-shoots portray a recovering
economy. Industrial growth has been above 4% for the past 2
months, whereas retail inflation continues to remain lower.
Although there has been a double digit deficit in the rainfall
this year, RBI is not too much worried about the pressure on
the food prices given the comfort it has derived from the
actions by the government to manage supply. An addition to
these positives was RBI increasing the foreign investment limit
in central government securities. This will help create a new
pool of money to compensate for the lowering SLR imposed on
banks.
Markets rejoiced at the bonnes nouvelles (good news) of the
50 basis points rate cut by RBI at the fourth bi-monthly
meeting. The main objective behind this was to enhance
growth in the economy. Mr. Raghuram Rajan hopes that
investment should respond more strongly after some certainty
about the extent of monetary stimulus in pipeline, even if the
transmission is low. With this transmission, investments in the
real economy would increase. This announcement was then
followed by a highly ‘dovish’ stance, with the RBI repeating
that it would remain in an ‘accommodative mode’. The rate cut
has increased the cumulative rate cut this year to 125 bps. It is
hearting that banks like SBI has cut its base rate by 40 bps.
All in all, the month saw events that were unexpected, events
that created a yin-yang sentiment among investors and events
that made India shining more convincing. RBI has taken the
first bold step on its part. The question now is what the
government will do on its part to grow our economy!
In this issue of Economy Matters, we analyse the recent Fed rate hike and Euro Zone economic prospects, in the section on Global Trends. We have covered data trends in GDP, IIP, Inflation, Monetary Policy and Trade in the Domestic Trends section. Find out the results of 2QFY16 In Corporate Performance section. Taxation section covers the views of Sumit Dutt Mazumder, former Chairman of CBEC on GST. The Sectoral Spotlight for this issue is on Financial Conditions Index for 3QFY16. Read Focus of the Month, to know about ‘Skilling India’, wherein experts from diverse areas present their views.
"Highlights":
Wage growth continues
Private consumption behind GDP growth
Situation in lending is improving
"In Focus":
The right moment to put the budget in order. Press conference of the Governor of Latvijas Banka (summary) – Ilmārs Rimšēvičs
Dear Investors,
September saw a spillover of the previous month’s equity
market correction. The main reason for this was the continuing
bleak global events, which also negated domestic macro greenshoots to a large extent. In the West, the possibility of a US Fed
rate hike lingers, keeping investors globally on their toes.
Amidst this global weakness, uncertainties of global markets
with respect to the Euro have reduced after Alexis Tsipras’
Syriza party returned to power once again in Greece, this time
with a majority. The Chinese government is also taking
initiatives like tightening trading rules on forex and stock
market to stabilize their economy. The slowdown in China in a
way has been India’s gain, which has led to India emerging as
the top destination for FDI investments, attracting $30 billion
by the end of June 2015.
Closer home, better looking green-shoots portray a recovering
economy. Industrial growth has been above 4% for the past 2
months, whereas retail inflation continues to remain lower.
Although there has been a double digit deficit in the rainfall
this year, RBI is not too much worried about the pressure on
the food prices given the comfort it has derived from the
actions by the government to manage supply. An addition to
these positives was RBI increasing the foreign investment limit
in central government securities. This will help create a new
pool of money to compensate for the lowering SLR imposed on
banks.
Markets rejoiced at the bonnes nouvelles (good news) of the
50 basis points rate cut by RBI at the fourth bi-monthly
meeting. The main objective behind this was to enhance
growth in the economy. Mr. Raghuram Rajan hopes that
investment should respond more strongly after some certainty
about the extent of monetary stimulus in pipeline, even if the
transmission is low. With this transmission, investments in the
real economy would increase. This announcement was then
followed by a highly ‘dovish’ stance, with the RBI repeating
that it would remain in an ‘accommodative mode’. The rate cut
has increased the cumulative rate cut this year to 125 bps. It is
hearting that banks like SBI has cut its base rate by 40 bps.
All in all, the month saw events that were unexpected, events
that created a yin-yang sentiment among investors and events
that made India shining more convincing. RBI has taken the
first bold step on its part. The question now is what the
government will do on its part to grow our economy!
Economists polled expect status quo in forthcoming monetary policy but rate cut likely in first half of FY 2017-18; Union Budget 2017-18 to be expansionary with fiscal stimulus to counter effects of demonetisation
The SVB Asset Management Economic Report, Q2 2017, is a review of and outlook on economic factors that impact global markets and business health.
In this edition, the team discusses the U.K.’s Article 50 notice and the FOMC’s current path towards normalization. The report also examines the Trump Administration’s first 100 days in office and current business sentiment.
In the current issue of Economy Matters, we discuss China’s GDP release for Q2:2016, policy stance of Bank of England and IMF’s latest global growth forecast in the section on Global Trends. In Domestic Trends, we present analysis of the trends emanating out of the recent releases on Monsoon progress, IIP, Inflation, Trade and CII’s Business Outlook Survey Results for Q1FY17. In Policy Focus, we present the highlights of the key policy documents released during June-July 2016. In Focus of the Month,the topic ‘Transforming Healthcare in India' has been covered.
In the current issue of Economy Matters, we analyse the economic prospects of US economy and the India-Mauritius tax pact in the section on Global Trends. In Domestic Trends, we analyse the trends emanating out of the recent releases on IIP, Inflation, Trade and Currency. Sector in Focus section discusses the prospects of e-commerce industry in India. In Focus of the Month, we discuss the impact of monsoons on the Indian economy. Special Feature carries an article on growth and job creation by Ms. A. Srija, Director, NITI Aayog.
US GDP growth slowed down once again in first quarter of 2016 amid signs of a global economic slowdown. Both consumers and businesses cut back on spending and US exports were hurt by economic weakness in overseas markets. Continued economic weakness, subpar inflation and global pressures are likely to cause the Federal Reserve to slow its pace of rate hikes this year from what had been expected. Closer home, in a significant move, India and Mauritius signed a landmark tax pact, aimed at tackling black money. The government expects the Protocol to tackle treaty abuse and round tripping of funds, curb revenue loss, prevent double non-taxation, streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius.
ChoiceBroking - Q2FY16 GDP growth at 7.4%; robust manufacturing expansion indicates revival in economic scenario. To read our monthly economic outlook please click here http://bit.ly/1QTqJKI
Monthly analysis of the performance of Uganda's economy with focus on macroeconomic indicators like inflation, exchange rate, private sector credit, imports and exports, revenue, expenditure, among others.
ASEAN Macroeconomic Trends_Indonesia’s Economic Growth for 3Q Remained Buoyan...Kyna Tsai
During the period of 1–15 November, Indonesia reported its economic growth rate (real GDP growth rate) for 3Q at 5.1%, levelling off from the 5.0% for 2Q. The central banks of Thailand, Malaysia, and the Philippines decided to maintain their policy interest rates at their respective monetary policy meetings. Retail sales in Singapore were affected by seasonal factors and showed negative growth for the first time in seven months. For more information, refer to the list of macroeconomic indices released over 1–15 November at the end of this report.
ASEAN Macroeconomic Trends_Indonesia Continues to Lower Interest Rates; Vietn...Kyna Tsai
During 16–30 September, amongst the participating countries in ASEAN, the central banks of Indonesia,
Thailand, and the Philippines each held monetary policy meetings, and Indonesia’s second consecutive
decision to lower its interest rates is worth attention. Furthermore, Vietnam exhibited a high real GDP
growth rate for 3Q, recording 7.5%. Please refer to the table attached at the end of this report for an
overview of the macroeconomic indices for ASEAN economies released during 16–30 September.
Economists polled expect status quo in forthcoming monetary policy but rate cut likely in first half of FY 2017-18; Union Budget 2017-18 to be expansionary with fiscal stimulus to counter effects of demonetisation
The SVB Asset Management Economic Report, Q2 2017, is a review of and outlook on economic factors that impact global markets and business health.
In this edition, the team discusses the U.K.’s Article 50 notice and the FOMC’s current path towards normalization. The report also examines the Trump Administration’s first 100 days in office and current business sentiment.
In the current issue of Economy Matters, we discuss China’s GDP release for Q2:2016, policy stance of Bank of England and IMF’s latest global growth forecast in the section on Global Trends. In Domestic Trends, we present analysis of the trends emanating out of the recent releases on Monsoon progress, IIP, Inflation, Trade and CII’s Business Outlook Survey Results for Q1FY17. In Policy Focus, we present the highlights of the key policy documents released during June-July 2016. In Focus of the Month,the topic ‘Transforming Healthcare in India' has been covered.
In the current issue of Economy Matters, we analyse the economic prospects of US economy and the India-Mauritius tax pact in the section on Global Trends. In Domestic Trends, we analyse the trends emanating out of the recent releases on IIP, Inflation, Trade and Currency. Sector in Focus section discusses the prospects of e-commerce industry in India. In Focus of the Month, we discuss the impact of monsoons on the Indian economy. Special Feature carries an article on growth and job creation by Ms. A. Srija, Director, NITI Aayog.
US GDP growth slowed down once again in first quarter of 2016 amid signs of a global economic slowdown. Both consumers and businesses cut back on spending and US exports were hurt by economic weakness in overseas markets. Continued economic weakness, subpar inflation and global pressures are likely to cause the Federal Reserve to slow its pace of rate hikes this year from what had been expected. Closer home, in a significant move, India and Mauritius signed a landmark tax pact, aimed at tackling black money. The government expects the Protocol to tackle treaty abuse and round tripping of funds, curb revenue loss, prevent double non-taxation, streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius.
ChoiceBroking - Q2FY16 GDP growth at 7.4%; robust manufacturing expansion indicates revival in economic scenario. To read our monthly economic outlook please click here http://bit.ly/1QTqJKI
Monthly analysis of the performance of Uganda's economy with focus on macroeconomic indicators like inflation, exchange rate, private sector credit, imports and exports, revenue, expenditure, among others.
ASEAN Macroeconomic Trends_Indonesia’s Economic Growth for 3Q Remained Buoyan...Kyna Tsai
During the period of 1–15 November, Indonesia reported its economic growth rate (real GDP growth rate) for 3Q at 5.1%, levelling off from the 5.0% for 2Q. The central banks of Thailand, Malaysia, and the Philippines decided to maintain their policy interest rates at their respective monetary policy meetings. Retail sales in Singapore were affected by seasonal factors and showed negative growth for the first time in seven months. For more information, refer to the list of macroeconomic indices released over 1–15 November at the end of this report.
ASEAN Macroeconomic Trends_Indonesia Continues to Lower Interest Rates; Vietn...Kyna Tsai
During 16–30 September, amongst the participating countries in ASEAN, the central banks of Indonesia,
Thailand, and the Philippines each held monetary policy meetings, and Indonesia’s second consecutive
decision to lower its interest rates is worth attention. Furthermore, Vietnam exhibited a high real GDP
growth rate for 3Q, recording 7.5%. Please refer to the table attached at the end of this report for an
overview of the macroeconomic indices for ASEAN economies released during 16–30 September.
Highlights
• Economic slump has bottomed out – expect slow recovery ahead
• 2009-10 growth forecasts will be revised upwards by most as the year progresses
• Expectations of global growth resurgence fuels commodities and crude prices
• Dollar dives, rupee surges to 47 - more trouble for exporters ahead
• Fuel price deregulation on the cards
• But all is not well – and overheated stock markets need to cool a bit
India: Kal, aaj aur kal
The numbers all seem to be looking up, the stock markets all seem to be rising once again, and cheer is back. There is spring in the air. One wonders what happened suddenly to make everything so nice. Anyhow, things as predicted are improving – largely because of heavy government interventions internationally. The lower interest rates in India are also starting to have their impact – this was all predicted, as interest rate reductions take some time to play out. But what is also predicted is that things will take a few months more to stabilise - we estimate growth for this financial year to be an unexciting 6.6%.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
ASEAN Macroeconomic Trends_Malaysia and the Philippines Undergoing Rapid Grow...Kyna Tsai
Of the critical macroeconomic indicators released for the ASEAN economies from 16–31 August, Thailand, Malaysia, and the Philippines announced their real economic growth rates (GDP growth rates) for 2Q 2017. The central banks of Indonesia and Thailand also held monetary policy meetings.
This report will focus on and look into the indices and economic policies of Indonesia, Thailand, Malaysia, and the Philippines, as well as the stirring political trends concerning the former Thai Prime Minister Yingluck Shinawatra.
Highlights
• As last newsletter predicted, manufacturing recovery has begun.
• Yet, exports will continue to stay depressed, SMEs will take a while to feel the positive swing.
• Prospects for emerging economies brighten, capital flows in.
• Inflows are notoriously fickle, so watch out for any turnaround if political factors disappoint.
India: Kal, aaj aur kal
The numbers are coming in clearer every month as Indian manufacturing recovers, thanks to strong domestic demand, due in large part to money from the pay commission, NREGS, high support prices for agri products last year etc. The fiscal stimulus began much before the global crisis hit India. We are not in anyway close to double digit growth, but the slump does seem to be over. Meanwhile, the stock market believes that all is well with the world, which isn’t true, of course, and if the election outcome disappoints in a fractured mandate, expect a rude shock once again.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Flash Report - Hungarian Inflation - 11 April 2018OTP Bank Ltd.
2%-ra emelkedett az éves bázisú fogyasztói árindex márciusban, azonban továbbra is számos hatás fékezi az árnyomás erősödését. Idén 2% közelében maradhat az infláció, jövőre azonban akár gyors emelkedést is láthatunk, ha az egyszeri tételek hatása kifut.
CII’s flagship monthly publication Economy Watch has been now revamped and rechristened as ‘Economy Matters’. Apart from encompassing all the key features of the old version, the new issue also carries a new section on Corporate Profitability to keep readers abreast about the latest trends in corporate performance. The ‘Economy Matters’ brought out by CII Research seeks to provide an in-depth update on current trends in the domestic and international economy and helps in tracking policy developments and understanding industry dynamics.
Indian Economy Next Quarter
Rains still not favouring India’s granary in the northwest, August rains key now
Pressure on pulses prices set to ease with imports and higher crop by winter
RBI holds rates, but inflationary pressures will force its hand by last quarter
Commodity prices set to rise as global growth signs turn more positive
High government borrowings pushing bond yields upwards
Subdued dollar as emerging economies show more promise this year
India : Kal, aaj aur kal
As we have been emphasising in the past few newsletters, despite the negative WPI inflation numbers, all is not calm on the inflation front. Right now attention has focused on inflation in food articles and manufactured food products, standing provisionally at 9.7% and 8.5% for the week ending July 25th. Consumer price indices for June are also registering higher inflation than previous months, CPI AL for instance stands at 11.52% inflation; this is on top of the 8.77% rate in June 2008. Clearly, the government’s ‘touchy feely’ talk on being the saviour of the poor has been negated by inflation. Could the government have done anything different? We believe it could have and should have. By preferring to reduce emphasis on the consequences of a high fiscal deficit on inflation, the government has done a great disservice to the country.
2. Economic goals of governments
✤ Full employment
✤ or at least as full as possible...
✤ Steady annual growth in output
✤ without overheating
✤ Stable prices (low but steady rise in prices over time)
3. Measuring economic performance
✤ Output of goods & services
✤ Changes in prices for goods & services over time
✤ Mood of consumers
✤ Employment
✤ Total supply of money
✤ Trade with other countries
4. Questions to ask about data
✤ Who is publishing the data, and who compiled it?
✤ What do the data cover, and what is left out?
✤ How reliable are the data?
✤ What is the time period for the data?
✤ Will the data be revised later?
✤ Are the data seasonally adjusted? Adjusted for inflation? Annualized?
5. More questions
✤ Is the data published as an index, or an absolute amount?
✤ If an absolute amount, what is the unit of measurement?
✤ What will you use for comparison? Year-earlier period? Previous
month or quarter?
✤ How should you describe the significance of the measure to your
reader?
6. Adjustments
✤ Seasonally adjusted
✤ Data “smoothed” using long-term seasonal trends
✤ Inflation adjusted
✤ Real: effects of inflation are removed
✤ Nominal: no adjustment for inflation
✤ Annualized: “what if” same trend continued for a whole year
8. Advance prep for covering data
✤ Always keep updated schedule of data announcements
✤ Before each major announcement, find out the expectations
✤ Conduct a poll of economists or other analysts
✤ Get your story template ready (plug in comparison data, expectations)
✤ Make appointments to speak with economists/analysts right after
announcement
9. Measuring economic performance
✤ Output of goods & services
✤ Changes in prices for goods & services over time
✤ Mood of consumers
✤ Employment
✤ Total supply of money
✤ Trade with other countries
10. Major economic indicators
✤ Gross Domestic Product
✤ Consumer Price Index
✤ Consumer Confidence Index
✤ Unemployment rate
✤ Money Supply
✤ Trade Balance
11. Gross Domestic Product
✤ Total value of goods & services produced within a country’s borders
✤ Typically measured using the expenditure method: adding up the
country’s spending on final goods & services
✤ GDP = Consumption + Investment + Government Spending +
(Exports - Imports)
12. Problems with GDP
✤ Doesn’t measure externalities (positive or negative)
✤ Pollution, education
✤ Doesn’t include a measure of overall quality of life, happiness nor
well-being
✤ Doesn’t account for the consumption of fixed assets (depreciation)
✤ In cross-border comparisons, doesn’t account for purchasing power
parity
13. World News: Asia: Indonesian growth rate rises
By Farida Husna and I Made Sentana
11 May 2010
JAKARTA -- Indonesia's economic growth accelerated in the first quarter to its fastest Change
pace since the third quarter of 2008, as households continued to spend amid benign
inflation and companies invested more on rising confidence in the economy, the
government said Monday.
The official statistics agency said Southeast Asia's largest economy expanded 5.7% Cause
year-to-year in the quarter ended March, accelerating from 5.4% in the fourth
quarter of 2009.
Meanwhile, non-seasonally adjusted quarter-to-quarter economic growth was 1.9%,
a reversal of the previous quarter's 2.4% contraction.
The data showed that the domestic economy's recovery remains on track, even if
growth came in slightly slower than expected.
The median forecast of 12 regional economist polled by Dow Jones Newswires was for
gross domestic product to have expanded 5.78% in the first quarter from a year
earlier. Expectations
Meanwhile, the median projection of 10 economists who provided quarter-to-quarter
forecasts was for GDP to have risen 2.1% compared with the preceding period.
Bank Indonesia isn't expected to start tightening monetary policy soon as inflationary
pressures aren't yet seen as a threat, analysts said. Last week, Bank Indonesia kept
its benchmark overnight rate at 6.50%, where it has been since August.
Household consumption, the pillar of the country's economy, rose 3.9% year-to-year
Context
in the first quarter; investment gained 7.9% and exports gained 19.6%, the statistics
agency data showed.
A 8.8% decline in the government spending, however, weighed on growth.
"We are still of the opinion that the underlying sentiment has ticked up in Indonesia,
and the momentum should be maintained going forward," said OCBC economist Comment
Gundy Cahyadi.
The government has set a 5.8% growth target for this year, compared with 4.5%
expansion last year.
Analysts said accelerating economic growth, stable inflation, and a more temperate
political atmosphere -- after parliament in March concluded its probe into a
controversial bank bailout -- should foster a more conducive environment for Future
investment.
14. Japan grows but stays fragile
By Mure Dickie in Tokyo and Robin Kwong in Taipei
21 May 2010
Change
Japan's economy grew a relatively robust 1.2 per cent in the first quarter but full
recovery from the worst postwar slump depends on demand from foreign export Future
markets and a rebound in private consumption that may be faltering.
Preliminary gross domestic product data released yesterday were equivalent to an
annualised growth rate of 4.9 per cent - below economists' forecasts but still an
refutation of fears last year that the economy might stall in early 2010 or suffer a Expectations
"double dip".
Naoto Kan, the finance minister, said the data reflected a "solid economic recovery"
but made clear it was too soon to relax. "We need to watch very closely to see if this
is an autonomous recovery," he said.
It can be dangerous to read too much into Japan's preliminary estimate of GDP, a
statistic often revised heavily.
In the third quarter of last year, for example, the economy was initially thought to
have expanded 1.2 per cent but was later judged to have contracted and is now
Context
recorded as having expanded 0.1 per cent.
However, yesterday's first-quarter estimate left no doubt of Japan's continuing
reliance on external demand for growth, with net exports of goods and services
accounting for 0.7 percentage points of the 1.2 per cent quarter-on-quarter Cause
expansion.
The Japanese data offered some signs that Japan's recovery was broadening, with
growth in all categories of public demand, including residential investment, which
declined sharply throughout 2009.
"Rising exports and production have spilled over to domestic demand," wrote Kiichi
Murashima, economist at Citigroup Global Markets, in a research note. Comment
But the pace of quarter-on-quarter growth in private consumption softened
considerably, falling to 0.3 per cent - its weakest performance since the first three
months of last year - suggesting a waning effect of government stimulus efforts.
Much could now depend on the impact on consumption of a monthly Y13,000 ($145,
€118, £102) child allowance introduced by the Democratic party-led government.
Some analysts say many parents are likely to save rather than spend the windfall. Future