What happened this week 19/08 – 23/08

Thailand

MPC maintains rate at 2.5% again – The Bank of Thailand’s Monetary Policy Committee (MPC) will likely stand pat on the policy rate for the rest of this year after keeping it unchanged at 2.5% for a second straight meeting yesterday. (Bangkok Post, 22/08/13)
MPC expected to maintain policy rate – Despite the slowdown in economic growth, economists expect the central bank’s Monetary Policy Committee to maintain the key interest rate at 2.5% at its meeting on Wednesday. (The Nation, 19/08/13)
No quick fix in store for soaring debt – Despite the swelling household debt level, the Bank of Thailand has not planned any immediate measures to address the problem for fear of aggravating the already sluggish economy. Implementing strict measures could further cool down the economic growth amid tepid domestic consumption and weak global demand, particularly in China, said governor Prasarn Trairatvorakul. The move is also unnecessary since the rising household debt has not reached a critical level. The current household debt is estimated at Bt8tn, or 80% of gross domestic product (GDP), according to the central bank’s governor. Of the total, less than half, or Bt3.8tn, came from commercial bank loans. The rest was from state-owned specialized financial institutions (Bt2tn), cooperatives and other lending sources (Bt1tn each), he said. (Bangkok Post, 19/08/13)
Govt slashes GDP growth projection — The government has slashed its economic growth forecast for this year further in light of slowing exports, weakening domestic demand and possible delays in implementation of its water and infrastructure development plans. The government’s planning unit, the National Economic and Social Development Board (NESDB), yesterday cut its forecast for full-year gross domestic product (GDP) growth to a range of 3.8-4.3%, from 4.2-5.2% made in May. The agency also lowered its export growth estimate to 5% from 7.6%, reflecting demand weakness abroad. (Bangkok Post, 20/08/13)
Commerce admits slow global growth to hurt Thai exports — The Commerce Ministry has acknowledged that slow global growth could cause the Kingdom to miss its export target this year, while the turmoil in Egypt should not have much of an impact on Thai trade. (The Nation, 20/08/13)
BoT brushes aside talk of country’s recession – Bank of Thailand governor Prasarn Trairatvorakul yesterday moved to soothe jittery financial markets, saying quarter-on-quarter economic growth will return in the third quarter. (Bangkok Post, 21/08/13)
Ampon gets cabinet nod for BoT chairman – Cabinet secretary-general Ampon Kittiampon yesterday won the cabinet’s approval as the new chairman of the Bank of Thailand as expected, replacing Virabongsa Ramangkura. (Bangkok Post, 21/08/13)
Household debt ‘not yet a worry’ – Thailand’s household debt, which hit 75% of gross domestic product in the first quarter, is not high enough to trigger an economic crisis, said a Finance Ministry official. (The Nation, 21/08/13)
Ft to go up again — Regulators are to increase Ft again by Bt0.06-0.07/unit, pushing electricity costs up slightly higher in Sept-Dec. Another increase may be possible again next year due to higher costs. (Kom Chad Luek, 23/08/13)
Global
US: Existing-home sales rose strongly in July, increasing 6.5% to a seasonally adjusted annual rate of 5.39mn from a downwardly revised 5.06mn in June, according to the National Association of Realtors. The data beat market expectations. Meanwhile, U.S. mortgage applications dropped 4.6% from a week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Aug. 16. (Xinhua, 22/08/13)
Fed minutes provide no clear timing of stimulus tapering – Top officials of the U.S. Federal Reserve remained divided on the timing of scaling back its stimulus program, showed minutes of the Fed’s July policy meeting released Wednesday. The Fed officials generally anticipated that the growth of U.S. economy would pick up somewhat in the second half of 2013 and strengthen further thereafter. Factors cited as likely to support a pickup in economic activity included highly accommodative monetary policy, receding effects of fiscal restraint and continued strength in housing sector, the minutes showed. (Xinhua, 22/08/13)
US: U.S. homebuilders broke ground on more homes in July boosted by apartment construction, evidence of a recovering property market, the Commerce Department reported on Friday. Data showed U.S. privately-owned housing rose 5.9% in July, but the figure came in lower than expected.
Meanwhile, U.S. consumer sentiment for August slipped from a six-year high. The preliminary reading on consumer sentiment fell to 80.0 in August from 85.1 in July, according to the Thomson Reuters/University of Michigan index.
Non-farm business sector labor productivity grew at an annual rate of 0.9% in the second quarter of the year, as output increased more rapidly than hours worked, the Labor Department said on Friday. (Xinhua, 17/08/13)
US: The US Chicago Fed National Activity Index edged up to -0.15 in July, up from -0.23 in June, according to the Federal Reserve Bank of Chicago. (Xinhua, 20/08/13)
US: The preview of U.S. manufacturing Purchasing Managers’ Index (PMI) for August provided by market research group Markit rose to a five-month high of 53.9, higher than July’s final reading of 53.7 and in line with market expectations. The Federal Housing Finance Agency house price index for June gained 0.7% after rising 0.8% in May, showing the housing sector continues to mend.
The advance figure for seasonally adjusted jobless initial claims stood at 336,000 in the week ending Aug. 17, an increase of 13,000 from the previous week’s revised figure of 323,000, the U.S. Labor Department said on Thursday. But the number remained near a six-year low. The four-week moving average, a less volatile gauge, was 330, 500, a decrease of 2,250 from the previous week’s revised average of 332,750. (Xinhua, 23/08/13)
U.S. leading economic indicators rises more than forecast – The private Conference Board said on Thursday its Leading Economic Index gained 0.6% to 96.0 last month, after being unchanged in June. The improvement does “suggest better economic and job growth in the second half of 2013,” said Ken Goldstein, an economist at the Conference Board. Economists polled by Reuters had expected the index to gain 0.5%. The Conference Board had previously said its leading index was unchanged in June, but on Thursday it revised the reading. (Reuters, 22/08/13)
Malaysia: Malaysian central bank lowers growth forecast for 2013 – The Malaysian central bank on Wednesday revised its growth forecast for 2013 to 4.5% from 5.0%, citing influence of the weakened external environment. The economy expanded by 4.3% in the second quarter, compared with 5.6% in the corresponding period of 2012. For the first half of 2013, economy increased by 4.2%, compared with 5.4% in the first six months last year, well below the 5-6% growth target set by the central bank previously. (Xinhua, 21/08/13)
China: China sees 77.11 mn smartphones sold in Q2 – China has seen 77.11mn smartphones sold in the second quarter of 2013, about 85.3% of the country’s total mobiles sales volume, a major technology industry analyst said Wednesday. In last quarter, total mobile sales volume in China was about 90.39mn units, a 0.2% QoQ decrease but a 36% YoY increase, said a report released by Analysys International. In the smartphone sector, the Samsung, Lenovo and Coolpad are the top three brands. Their market shares were 18.2%, 11.1% and 9.8%. (Xinhua, 21/08/13)
Downgrade looms for China’s growth projection – Next month the Fiscal Policy Office plans to downgrade its projection for China’s economic growth this year from 7.9% after the purchasing managers index faded dramatically to 3.5% in the second quarter from 18% in the first quarter. (The Nation, 22/08/13)
China: PBOC governor says ready to liberalize deposit interest rates – China’s central bank governor Zhou Xiaochuan said Monday the economy will not post persistent slowdowns, indicating the bank is ready to free the long-awaited deposit interest rates to fully liberalize the financial market. During an interview, Zhou told reporters that the People’s Bank of China (PBOC) will continue to implement the prudent monetary policy and conduct some structural fine-tuning if needed. (Xinhua, 20/08/13)
Japan: Japan’s trade deficit logs ¥1,024bn in July – Japan’s goods trade deficit stood at ¥1,024bn (US$10.49bn) in July, according to government figures released Monday. Exports increased 12.2% from a year earlier, while imports expanded 19.6%, said the Japan’s Finance Ministry in a preliminary report. (Xinhua, 19/08/13)
China:  China’s home prices continue to rise in July – Prices of both new and existing homes continued to rise in most Chinese cities in July, according to official data released on Sunday. Of a statistical pool of 70 major Chinese cities, 62 saw month-on-month new home price rises, down from 63 in June, the National Bureau of Statistics (NBS) announced. (Xinhua, 18/08/13)
Japan: Abe forms consulting panel amid fears about tax hike fallout – The Japanese government has selected a group of people from varying backgrounds to act as a sounding board for Prime Minister Shinzo Abe ahead of a planned sales tax hike, the Cabinet Office said Tuesday. The group of 59 individuals is comprised of financiers, research think tank members, business leaders and nonprofit organization representatives, the office said. Government officials as well as leading economists have suggested that the planned sales tax hike may stifle the Japanese economy and make it impossible to hit Abe’s target of not just beating two decades of deflation, but hit an inflation rate of 2%. (Xinhua, 20/08/13)
Spain: Spanish public debt in June reaches 90.2% of GDP – Spain’s public debt rose by €6.37bn (US$8.48bn) from May to June, representing 90.2% of the country’s gross domestic product (GDP), according to data released on Friday by the Bank of Spain. (Xinhua, 17/08/13)
Spain: Spain sells €4.1bn of bonds at lower yields – The Spanish treasury on Tuesday successfully placed treasury bonds valued at €4.1bn (US$5.5bn) at favorable interest rates. About €1.3bn of bonds with a six-month lifespan carried an average interest rate of 0.83%, below the 0.95% registered at the previous auction on July 16. The remaining €2.8bn worth of bonds with 12-month lifespans fetched an average interest rate of 1.2%, below the 1.5% of the previous auction. (Xinhua, 20/08/13)
Germany: German GDP growth likely to mormalize In H2: Bundesbank — Germany’s economic growth is likely to return to normal and steady rates in the second half of 2013, Bundesbank said in its monthly bulletin on Monday. Private spending as well as residential construction will support the economy, while domestic investment will remain subdued without a long-term improvement, the central bank said. Further, inflation is forecast to ease again. In July, harmonized inflation stood at 1.9%. Data released last week showed that the economic growth gathered pace after stagnating in the first quarter. GDP was up 0.7% in the second quarter. Bundesbank forecast 0.3% growth for this year. (RTT News, 19/08/13)
Eurozone: Eurozone production in construction sector up 0.7% in June – Eurozone production in construction rose by 0.7% in June compared with previous month, the European Union (EU) statistics office Eurostat said on Tuesday. According to the figures showed by Eurostat, the month-on-month rate rose by 0.8% at the same time for the 27 members of the EU, excluding Croatia which became the 28th EU country on July 1, 2013. (Xinhua, 20/08/13)
China: HSBC: China begins to recover – China’s manufacturing industry stabilized in August with the help of new orders, according to the HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) released Thursday. The headline figure rose to a four-month high of 50.1, from 47. 7 in July. “China’s manufacturing growth has started to stabilize on the back of modest improvements of new business and output. This is mainly driven by the initial filtering through of recent fine- tuning measures and companies’ restocking activities, despite the continuous external weakness,” said Qu Hongbin, chief economist for greater China and co-head of Asian Economic Research at HSBC. (Xinhua, 23/08/13)
Europe: Eurozone flash manufacturing PMI for August also rose to an over two-year high, according to Markit. (Xinhua, 23/08/13)
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