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Starbucks boycott? Nike shutdown? China holds trade war leverage

BEIJING, Aug 21 — America’s corporate bosses could be excused if they don’t agree with President Donald Trump’s boasts that a trade war is “easy to win.” They can just reflect on the levers of pain China pulled against South Korean-owned…


UK government aims to boost exports to 35pc of GDP

LONDON, Aug 21 — The British government will set out a new export strategy today aimed at boosting exports to 35 per cent of gross domestic product, as it looks to increase trade ties with the rest of the world after leaving the European Union….


Business leaders’ confidence in UK economy at lowest so far this year

LONDON: Business leaders’ confidence in the British economy has fallen to its lowest point this year reflecting the impact of uncertainty over Britain’s exit (Brexit) deal with the European Union (EU), according to a survey published on Monday. With less than eight months to go until Britain is due to leave the EU, the government […]


Analysts downgrade Malaysia’s GDP forecasts after slow 1H18

KUCHING: Analysts are lowering their growth forecasts for Malaysia’s Gross Domestic Product (GDP) following a lower-than-expected slowdown in the second quarter of 2018 (2Q18) to 4.5 per cent year on year (y-o-y) from 5.4 in 1Q18. Kenanga Investment Bank Bhd (Kenanga Research) saw that the lower GDP in 2Q18 was below both consensus and house […]


‘Supplementary budget not needed’

PUTRAJAYA: The government does not need a supplementary budget for now as the country’s fiscal deficit is under control, says Deputy Finance Minister Datuk Ir Amiruddin Hamzah.

He said a well-managed and sustainable fiscal deficit will strengthen Malaysia’s economy and the country will not need to borrow again.

“We will not need a supplementary as the government is controlling the fiscal deficit in terms of expenditure and income. Even if there are changes, controlling the fiscal deficit is our priority in growing the national economy,” he said after handing over RM34 million in financing under the MyCreative Ventures financing scheme to 19 creative companies here today.

On Aug 12, Prime Minister Tun Dr Mahathir Mohamad said the government was considering tabling a supplementary budget.

Earlier, Finance Minister Lim Guan Eng announced that Malaysia’s projected fiscal deficit would rise to RM40.1 billion in 2018 from RM39.8 billion, which would maintain the federal government budget deficit at 2.8% of gross domestic product (GDP).

Amiruddin in his opening speech urged companies in the creative industry to play a role in formulating a product commercialisation plan by combining the creative arts with the tourism sector.

“This initiative has the potential to contribute to the nation’s economy as the tourism sector, which is based on the arts and culture, could generate a lucrative revenue, for example, a country like France earns about RM934 billion a year from their tourism sector,” he said.

MyCreative CEO Riza Saian said Malaysia’s creative industry contributes just 2% to GDP compared to over 5% in Indonesia, Singapore and Korea.

“Many creative enterprises in Malaysia are at an early stage and need more time to earn substantial profits. Malaysia has a wealth of creative talents, but their business skills on the whole need to be enhanced,” he said.

Riza noted that RM200 million had been invested in 138 creative companies under 10 categories – visual arts, traditional arts, music, fashion, design, creative studies, culinary arts, creative content, literature and performance arts.

The financing is in line with MyCreative’s objective of supporting the implementation of the national creative industry policy and stimulating the growth of the creative industry through a strategic and innovative financing scheme in the form of equities, loans or a combination of both, he said. – Bernama


Supplementary budget not needed for now

PUTRAJAYA: The government does not need a supplementary budget for now as the country’s fiscal deficit is under control, says Deputy Finance Minister Datuk Ir Amiruddin Hamzah.

He said a well-managed and sustainable fiscal deficit will strengthen Malaysia’s economy and the country will not need to borrow again.

“We will not need a supplementary as the government is controlling the fiscal deficit in terms of expenditure and income. Even if there are changes, controlling the fiscal deficit is our priority in growing the national economy,” he said after handing over RM34 million in financing under the MyCreative Ventures financing scheme to 19 creative companies here today.

On Aug 12, Prime Minister Tun Dr Mahathir Mohamad said the government was considering tabling a supplementary budget.

Earlier, Finance Minister Lim Guan Eng announced that Malaysia’s projected fiscal deficit would rise to RM40.1 billion in 2018 from RM39.8 billion, which would maintain the federal government budget deficit at 2.8% of gross domestic product (GDP).

Amiruddin in his opening speech urged companies in the creative industry to play a role in formulating a product commercialisation plan by combining the creative arts with the tourism sector.

“This initiative has the potential to contribute to the nation’s economy as the tourism sector, which is based on the arts and culture, could generate a lucrative revenue, for example, a country like France earns about RM934 billion a year from their tourism sector,” he said.

MyCreative CEO Riza Saian said Malaysia’s creative industry contributes just 2% to GDP compared to over 5% in Indonesia, Singapore and Korea.

“Many creative enterprises in Malaysia are at an early stage and need more time to earn substantial profits. Malaysia has a wealth of creative talents, but their business skills on the whole need to be enhanced,” he said.

Riza noted that RM200 million had been invested in 138 creative companies under 10 categories – visual arts, traditional arts, music, fashion, design, creative studies, culinary arts, creative content, literature and performance arts.

The financing is in line with MyCreative’s objective of supporting the implementation of the national creative industry policy and stimulating the growth of the creative industry through a strategic and innovative financing scheme in the form of equities, loans or a combination of both, he said. – Bernama


RAM revises Malaysia’s 2018 fiscal deficit to 3.2pc

KUALA LUMPUR, Aug 20 — RAM Ratings has revised Malaysia’s fiscal deficit expectations for 2018 to 3.2 per cent of the Gross Domestic Product (GDP), which is a still-manageable level from 2.8 per cent previously. It said fiscal gains derived from…


Economists rule out possibility of Malaysia slipping into recession

KUALA LUMPUR: Economists have ruled out the possibility of the country slipping into a recession as the domestic economy is still expanding with macro indicators staying positive.

Malaysia's gross domestic product (GDP) growth decelerated to 4.5% in the second quarter this year (2Q18), compared with 5.4% in the previous quarter and 5.9% in the final quarter of last year.

Last Friday, Bank Negara Malaysia cut its forecast for GDP growth this year to 5.0% from 5.5% to 6.0% previously, given the slower-than-expected expansion in the second quarter.

MIDF Amanah Investment Bank chief economist Dr Kamaruddin Mohd Nor told SunBiz that the pace of economic growth will be influenced by various supply and demand driven factors, noting the disruption in gas production and crude palm oil dragging overall growth in 2Q18.

Thus, he said, the GDP performance in the second half of 2018 (2H18) is expected to be better than the 4.9% average recorded in the 1H18 mainly driven by domestic consumption.

“Investment from private and public sector will also pick up in 2H18,” Kamaruddin said.

Meanwhile, Malaysian Institute of Economic Research (MIER) senior research fellow Dr Shankaran Nambiar said he does not expect the economy to do too well this year, setting his overall growth projection for 2018 at 4.5-5.0%, on expectations of more prudent management of the economy by the government.
Factors that could slow down GDP growth, according to him, include the rescaling of expenditure on investments and infrastructure projects.

“With these projects being pulled backed, the multiplier effects will be lost. The switch from the goods and services tax (GST) to the sales and services tax (SST) again involves costs to businesses, especially small and medium enterprises. The revenue that will be collected will be lower. However, this was part of the manifesto and the government is committed to accomplishing its promise. The government's argument was that the tax burden on the B40 should be reduced,” he said.

Noting that while cutting back infrastructure projects is a necessary part of the cost of transforming the economy, one can also expect the government to work out new tax schemes to raise revenue in the year ahead, which is likely to be seen in the upcoming Budget 2019. This is, however, not expected to burden the B40 (bottom 40% of household income) group.

“As a counter-balance to the cut in projects, the government will surely design pathways to reinvigorate the industrial and services sectors. The government can be expected to take a more proactive stance to developing the economy after having dealt with the mismanagement arising from 1MDB and other such ventures.

“Another supportive feature is the exuberance felt by consumers and businesses. This should help drive domestic demand and compensate for any weaknesses in exports,” Shankaran explained.

RAM Ratings said it revised down 2018 GDP growth for Malaysia to 4.9% from 5.2% on the back of robust private consumption and slowing import activity.

The rating agency forecasts the headline inflation to stay subdued at 1.3% on the back of a sizeable downward pull from GST-zerorisation, the reinstatement of fuel subsidies as well as a lower-than-expected contribution from food inflation this year.

In view of the lower core inflation trajectory and moderating growth, RAM said, there seems to be some downward bias for the Overnight Policy Rate (OPR) this year.

“However, our base case is still for the OPR to stay put at 3.25% for the rest of the year, as we feel that lingering policy uncertainties and macro risks may continue to pose some capital outflow bias,” it added.

Meanwhile, Bank Negara Governor Datuk Nor Shamsiah Mohd Yunus said the slower pace in the second quarter was attributable to commodity supply shocks in the mining as well as agriculture sectors that led to supply disruptions.
Growth in the mining sector contracted due mainly to unplanned supply outages, while the agriculture sector was affected by production constraints and adverse weather conditions.

On the supply side, major economic sectors, namely the services and manufacturing, remained the key drivers of growth.

Overall, Shamsiah said, Malaysia's macroeconomic fundamentals remain strong, providing the country with the requisite buffers to effectively manage potential shocks to the economy.

Commenting on developments in Turkey, the central bank chief said Malaysia's economic exposure to the crisis-hit country is rather small, noting that corporate debt exposure to Turkey is only at about 0.17% of total corporate debt.

“And in terms of the exposure to the Turkish lira denominated volumes is even smaller, at 0.03% of total corporate external debt,” she added.


Trade war puts new strains on America Inc’s factories in China

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SHENZHEN, Aug 20 — Larry Sloven arrived in southern China three decades ago, just as the region was taking off as the low-cost manufacturing centre of the world. Since then, he has exported millions of dollars of goods, ranging from power tools to…


Greece emerges from bailouts relieved, but not euphoric

ATHENS, Aug 19 — The youngest Greeks may not be able to remember what life was like beforehand: The third and last of the country’s international bailouts comes to an end tomorrow, and while Greece is faring better, it still bears the scars of…