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BOJ may revise up CPI forecast but deflation to drag
The Bank of Japan could say this month that consumer prices will stop falling next fiscal year, sources say, but analysts said it would keep its easing bias as a full-fledged escape from deflation is still a distant goal. That would mark an upgrade to the BOJ’s current price forecast for the year to March 2012, sources familiar with central bank thinking said. Economists say that while this is achievable, price momentum won’t be strong enough to signal a decisive end to deflation given the large gap between supply and demand. The central bank has given slightly more positive views on the economy in recent weeks due to an export-driven rec... -
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Greece deal slashes contagion risk -UniCredit CEO
Eurozone finance ministers approved a 30 billion euro emergency aid plan for debt-plagued Greece on April 11. Together with at least 10 billion euros expected from the IMF in the first year, it could add up to the biggest multilateral financial rescue ever attempted. “This has been a very important intervention,” Alessandro Profumo, the head of UniCredit , told Reuters Insider television. “In my opinion the contagion risk is dramatically lower today.” He also ruled out a spillover to eastern Europe, a region where UniCredit is a major player. “Today we are not seeing specific risk (in eastern Europe),” he said. “To talk of the... -
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Kenya Treasury says no borrowing for extra $543m
“Borrowing for this year is even closed. There will be no more borrowing,” Geoffrey Mwau, economic secretary at the Finance Ministry, told reporters. Treasury wants an additional 27.62 billion shillings for recurrent expenditure and another 14.39 billion shillings for development programmes. The budget factored in domestic borrowing of 109.5 billion shillings but the government increased this by 15 billion. Mwau said the extra cash would go to the Interim Independent Elections Commission in the run-up towards a referendum on a proposed new constitution expected by July. A new charter is viewed as an important component for stability in ea... -
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Brain drain, low investment hamper African science
Africa’s contribution to the global body of scientific research is very small and does little to benefit its own populations, according to a report from Thomson Reuters. Like India and China, Africa suffers from a “haemorrhage of talent”, the report said, with many of its best brains leaving to study abroad and failing to return. “The African diaspora provides powerful intellectual input to the research achievements of other countries, but returns less benefit to the countries of birth,” Jonathan Adams, director of research evaluation at Thomson Reuters, said in a statement as the report was published. Adams and colleagues, who use ... -
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Gulf values to catch up with emerging markets
Though foreign investors have slowly started coming back to the region, there still exists a 40-50 percent discount between the Middle East markets and that of the emerging economies, mainly the BRIC nations, said Zin Bekkali. “BRIC is still beautiful, the fundamentals are similar to the region but it has got expensive now. So that valuation gap has to bridge and the discounts will disappear,” said Bekkali, who heads the asset manager focused on the Middle East, Central Asia and Africa. The MSCI Emerging stocks Index, gained more than 78 percent in 2009, significantly outperforming the MSCI Arabian Markets Index, which rose only around 22... -
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China state firms hand in plans to exit property sector
China’s agency overseeing big state-owned businesses has received plans from 78 state companies spelling out how they intend to sell out of the nation’s heady property market, according to sources. The China Securities Journal also reported that the state-owned Assets Supervision and Administration Commission (SASAC) was compiling a general plan to achieve the divestment, intended to help cool fast-rising real estate prices. “In the specific implementation, divestment from commercial real estate will come first,” said the newspaper, citing an interview with an unidentified SASAC official. But the official said asset sales could be com... -
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World Bank set to approve S Africa utility loan
The World Bank is set to approve a controversial $3.75bn loan to help South African state utility Eskom develop a coal-fired power plant despite objections from the US and environmental groups. Eskom has argued it has no immediate alternative but to develop the 4,800-megawatt Medupi coal-fired plant in the northern Limpopo region to ease chronic power shortages in South Africa and ensure power supplies to neighbouring states. While $3bn of the loan will fund the bulk of the coal-fired plant, the remainder of the financing will go toward renewables and energy efficiency projects. “We believe this project is important for South Africa and Sou... -
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World Bank lending hits record $100bn
The World Bank stepped up lending in July 2008 at the request of member countries as demand from developing countries increased in the face of a worsening world recession and sharp drop in global trade. The bulk of the lending since the onset of the crisis in 2008, about $60.3bn, was to middle-income countries, which struggled to borrow on global financial markets. Typical lending for these countries had averaged about $15bn a year before the crisis. Meanwhile, loans and grants through the bank’s fund for the world’s poorest countries reached $21.2bn during the crisis. This compares to about $12bn a year prior to the crisis. Kyle Peters, ... -
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Volcker: Taxes likely to rise eventually to tame deficit
The US should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker has announced. Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax “was not as toxic an idea” as it has been in the past and also said a carbon or other energy-related tax may become necessary. Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the US budget deficit under control may require such moves. “If at the end of the day we need to raise taxes, we should rais... -
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Southeast Asia could grow 5.6% this year – ASEAN
Southeast Asian economies will grow up to 5.6 percent this year but the expansion could be jeopardised if economic stimulus is withdrawn too early, according to a report by a regional body. Nevertheless, the governments of the 10-member Association of Southeast Asian Nations (ASEAN) need to design an orderly exit strategy to show that they have inflation expectations under control, said the latest draft of the ASEAN Surveillance Report. “Following the pace of growth in Asia, the ASEAN economy will grow by about 4.9 percent to 5.6 percent in 2010 with ASEAN economies recording moderate to strong growth,” it said. The report was presented a...
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