What happened this week 22/07 – 26/07

Thailand
BoI expects to hit investment incentive goal of Bt1trn – The Board of Investment remains confident that the total value of applications for investment privileges this year will meet the target of Bt1trn, though the number in the second half might not be as high as in the first, said Udom Wongwiwatchai, secretary-general of the BoI. (The Nation, 25/07/13)

MoF speeds up borrowing — The Ministry of Finance is accelerating borrowings in order to invest and for stimulus spending in the second half of the year. It expects Bt250-270bn to flow into the economy. The Fiscal Policy Office (FPO) expects GDP to grow by 4-4.5% this year. (Krungthep Turakij, 24/07/13)

External factors hurt locally – Despite the nascent economic recovery in the US and Europe, the Thai economy still faces lingering global financial market volatility in the second half, says Bank of Thailand governor Prasarn Trairatvorakul. (Bangkok Post, 24/07/13)

State stands pat on export growth goal – The government is maintaining its export growth forecast within a range of 7-7.5% this year despite several agencies recently cutting their estimates. (Bangkok Post, 24/07/13)

BoT cuts 2013 growth forecast to 4.2%— The BoT, releasing its new projection on Friday, lowered the 2013 GDP projection to make it in line with the delayed global recovery and moderate domestic demand. Paiboon Kittisrikangwan, BoT assistant to the governor and secretary of the Monetary Policy Committee (MPC), said that given the slow growth registered in China and Asia, Thailand’s export recovery is expected to be delayed. The 2014 GDP is projected to grow at 5% as earlier projected. He said that 2013 exports are projected to grow 4%, down from the previously forecast 7.5%. 2014 exports are expected to grow at 8%, instead of the earlier projected 10%. Inflation readings will likely remain low. Both demand and cost pressures have subsided in line with a moderate demand outlook and the lower projected path of global oil and commodity prices, coupled with the increase in domestic prices of liquefied petroleum gas that has been postponed for another two months, the BoT statement said. 2013 Inflation is projected at 2.3%, lower than the earlier 2.7%, and core inflation at 1.1% down from 1.6%, according to the BoT. (Xinhua, 20/07/13)

Global

US: New-Home Sales Surge 8.3% – Sales of new homes surged in June despite higher mortgage rates, maintaining momentum for a key sector driving the economic recovery. New-home sales increased 8.3% last month to a seasonally adjusted rate of 497,000, the Commerce Department said Wednesday. That was the highest level since May 2008. Sales were up 38% from a year earlier. (The Wall Street Journal, 24/07/13)

U.S. July flash factory PMI rises to 4-month high – The U.S. flash manufacturing purchasing managers’ index rose to a 53.2 reading in July from 51.9 in June, Markit said Wednesday. This is the highest level in four months. Details of the report were strong as new orders and employment increased. (MarketWatch, 24/07/13)

Crude stockpiles decreased 29.9 million barrels in the four weeks ended July 19, the largest four-week drop in data dating to 1982, according to the EIA, the Energy Department’s statistical unit. (The Washington Post, 24/07/13)

China: The preliminary purchasing managers’ index (PMI) of China dropped to 47.7 in July, down from a final 48.2 in June and the lowest in 11 months, an HSBC report showed Wednesday. A PMI reading above 50 indicates growth, while a reading below 50 indicates contraction. The PMI data suggested that China’s manufacturing operating conditions deteriorated at the quickest pace since last August. (Xinhua, 25/07/13)

Europe: Eurozone banks tighten lending rules despite easier funding – Eurozone banks’ funding conditions improved in the second quarter but they tightened lending standards for both companies and mortgages even though they expect demand to bottom out in the coming three months. In its latest quarterly Bank Lending Survey, the European Central Bank said on Wednesday fewer banks expect to tighten lending rules further in the July-September period. (Reuters, 24/07/13)

Economists express cautious optimism over eurozone growth – Economists expressed cautious optimism on Wednesday over news of improved euro area economic data which might indicate that the eurozone could be heading for a moderate growth in the second half of 2013ใ The euro area flash composite PMI moved back above 50 in July, increasing 1.7 points on the month to 50.4 versus an expected 0.4 point gain, driven by manufacturing and services indices increasing by 1.3 points to 50.1 and 1.4 points to 49.6 respectively. (Xinhua, 25/07/13)

US: U.S. existing-home sales declined in June, according to the National Association of Realtors, missing market expectations. Total existing-home sales dipped 1.2% to a seasonally adjusted annual rate of 5.08mn in June. The Chicago Fed National Activity Index, a monthly index designed to gauge overall economic activity and related inflationary pressure, stood at minus 0.13 in June, up from minus 0.29 in May. Readings below zero typically imply below-trend national economic activity and subdued inflationary pressure over the coming year. (Xinhua, 23/07/13)

Japan: Japan’s ruling bloc wins upper house poll, sets economy as priority – Japan’s ruling camp, the Liberal Democratic Party (LDP) and the New Komeito Party, won the upper house election on Sunday, putting an end to the “divided Diet” and setting economic improvement as its priority after the control of both chambers of the Diet. The ruling bloc secured 76 seats in the upper house election as the LDP and the New Komeito Party has secured 65 seats and 11 seats respectively. Along with the uncontested 59 seats of the two parties, the ruling camp has maintained a majority of 135 seats in the 242-seat upper house. (Xinhua, 22/07/13)

Britain: HSBC upgrades British economic growth forecast to 0.6% in Q2 – The British economy might grow at 0.6% in the second quarter of this year, 0.2 pps higher than its previous estimate in April, said HSBC on Friday in London. (Xinhua, 19/07/13)

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