Call to reinstate power of FIDF on bailouts — The Fiscal Policy Office (FPO) will propose that Finance Minister Apisak Tantivorawong reinstate the power of the FIDF to bail out failing financial institutions in a bid to avert future financial meltdowns. (Bangkok Post, 1/8/16)
Fitch predicts increase in Thai bad loans — Fitch Ratings expects non-performing loans (NPLs) at Thai banks to rise but at a slower pace — for the rest of 2016 amid a weak operating environment after second-quarter results showed deteriorating profitability and asset quality. “The results underscore our negative outlook on the sector. Still, we believe Thai banks’ capital buffers and reserve coverage should remain adequate to withstand a cyclical downtrend,” the international credit rating agency said in a release. (B angkok Post, 1/8/16)
Central bank declares biggest dip in a decade – Foreign direct investment (FDI) in Thailand in the first half of the year fell by more than 90% in value to the lowest mark in over a decade at US$347 million, reports the Bank of Thailand. (Bangkok Post, 2/8/16)
British central bank cuts interest rate to record low – The Bank of England (BoE) Thursday cut its interest rate from 0.5 percent to a record low level of 0. 25 percent, as Britain pushes for a stimulus to expand its economy after a historic vote to leave the European Union. (Xinhua, 04/08/16) Imported vehicle sales in Japan rise 7.8% in July – Sales of new imported cars, trucks and buses in Japan, including those made abroad by Japanese carmakers, rose 7.8 percent in July from a year earlier to 26,338 units, an industry body said Thursday.
China Caixin July services PMI declines to 51.7 versus 52.7 in June — Growth in China’s services sector cooled in July, with weaker expansions in activity and new work prompting companies to shed staff for first time in four months as they looked to cut costs, a private survey showed on Wednesday. The Caixin/Markit services purchasing managers’ index (PMI) fell to 51.7 in July on a seasonally adjusted basis, from an 11-month peak of 52.7 in June.
BOJ Opts for Limited Stimulus Expansion, Plans Policy Review — The Bank of Japan kept its key monetary tools unchanged, and will mount a comprehensive review of its policy framework due to “considerable uncertainty” about the outlook for inflation, which has consistently underperformed the central bank’s forecasts. The yen jumped. Governor Haruhiko Kuroda and his team did enlarge a program of buying exchange traded funds by 2.7 trillion yen ($26 billion) a year, in a move to shore up confidence in light of post-Brexit volatility in financial markets and a slowdown in emerging markets. A dollar-lending facility was also expanded, the BOJ said in a statement in Tokyo Friday. Kuroda reiterated that further easing will be done if needed and said the central bank hasn’t hit a policy limit. (Bloomberg, 29/7/16)
Recession ahead in Britain? Factories slow, business confidence tumbles – The Markit/CIPS UK manufacturing purchasing managers’ index(PMI) fell to 48.2 in July from 52.4 in June, below an initial “flash” reading reported in late July of 49.1 and its lowest since February 2013. (Reuters, 2/8/16)
EU bank stress tests: vulnerability of Barclays and RBS under scrutiny — Analysts are scrutinising the potential hit Royal Bank of Scotland and Barclays could take to their financial strength at times of market turbulence following the publication of EU-wide health checks on the financial sector. The Bank of England said the stress tests, which were overseen by the panEuropean banking regulator, showed the UK banking sector was resilient enough to cope with downturns in the economy and the markets. Of the 51 banks tested, one – Italy’s Banca Monte dei Paschi di Siena – had its entire capital base wiped out under the imaginary scenario of a big drop in economic growth. (The Guardian, 30/7/16)
US preliminary Q2 gross domestic product at 1.2% vs. 2.6% expected — The U.S. economy grew far less than expected in the second quarter as inventories fell for the first time since 2011, but a surge in consumer spending pointed to underlying strength. Gross domestic product increased at a 1.2 percent annual rate after rising by a downwardly revised 0.8 percent pace in the first quarter, the Commerce Department said on Friday. The economy was previously reported to have grown at a 1.1 percent pace in the first quarter. (CNBC, 29/7/16)
Eurozone GDP growth halves as French economy stalls — Eurozone economic growth halved in the second quarter, but the 19-nation single currency area moved away from deflation. GDP rose by 0.3% between April and June, in line with expectations but below 0.6% growth in the first quarter. France, the eurozone’s second-largest economy, saw no growth after expanding by 0.7% in the first quarter. Eurozone inflation rose to 0.2% in July from 0.1% in June as a result of higher food, alcohol and tobacco prices. (BBC, 29/7/16)
