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Tag: trade

  • Malaysia won’t lose out to Vietnam: Council

    Malaysia won’t lose out to Vietnam: Council

    Malaysia will not lose its competitiveness to Vietnam even though it does not ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Malay Economic Action Council researcher Mohd Effuan Aswadi Abdul Wahab said there was no significant proof that there would be an increase in investment once a country signed a free trade agreement (FTA).

    “It is said that many companies, especially manufacturing firms will move to Vietnam after the country has ratified the CPTPP as the trade agreement is being seen as opening doors for companies to go to countries which have ratified the FTAs. This is certainly not true,“ he said.

    He said investors would look into various factors, including political stability, better infrastructure, skilled workers and rule of law, before making any investment decision.

    “Investors will certainly look into Malaysia’s economic policies before they make any investment decision.

  • Vietnam’s coffee traders cut output forecast by 10 percent

    Vietnam’s coffee traders cut output forecast by 10 percent

    Traders in Vietnam lowered their coffee output forecasts by 10 percent this week as a bumper harvest came to an end. They now expect an output of about 27 million bags of 60 kg each for the 2018/19 crop year that began on Oct. 1, compared with earlier forecasts of 30 million bags. “We are not surprised to see a lower output as stubbornly low domestic prices have discouraged many farmers to fertilize and water their trees, while weather condition was also not supportive,” a trader based in the province of Dak Lak said on Thursday.

    “Farmers in the Central Highlands have harvested all of the fresh beans of the 2018/19 crop year,” he said.

    Farmers in the Central Highlands, the country’s key coffee growing area, sold coffee at 33,500-34,000 dong ($1.44-$1.47) per kg on Thursday, compared with 33,200 dong-33,700 dong a week earlier.

    “Though output is lower, domestic prices have not risen due to external factors, including larger forecasts by foreign agencies,” said another trader based in Ho chi Minh City.

    Vietnam’s coffee exports in January are forecast to be between 150,000 tonnes and 180,000 tonnes, compared with an estimated 160,000 tonnes in December.

    Traders in Vietnam offered 5 percent black and broken grade 2 robusta at a $40 per tonne discount to the March contract, compared with a $45-$50 discount last week.

    Meanwhile, in Indonesia, trading continued to be muted with traders saying premium for the grade 4 defect 80 robusta stayed unchanged for a fourth straight week at $20-$30 to the March contract.

    “Supply may only start coming around April because some areas in Bengkulu will have some harvest then,” said a trader, referring to a province neighbouring Lampung.

    Main robusta harvest in southern Sumatra typically takes place around the mid-year, but a smaller harvest usually happens a few months earlier.

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  • Confidence Returns to Indonesia’s Financial Markets

    Confidence Returns to Indonesia’s Financial Markets

    After a steep correction last year and pressure on the rupiah, Indonesia expects stability to return to its financial markets this year as foreign capital starts flowing back into the domestic market. The first bond offerings of the year last week were more than three times oversubscribed, with interest mainly coming from foreign investors, who also bought more local stocks than what they sold over the past two weeks, reversing a net selling trend that persisted throughout last year, according to Indonesia Stock Exchange (IDX) data.

    For Bank Indonesia Governor Perry Warjiyo, the return of foreign capital inflows came as no surprise. The central bank has been aggressive in raising its benchmark interest rate – the seven-day reverse repo rate – which was increased by 175 basis points to 6 percent over the past nine months in response to tightening by the United States Federal Reserve.

    As it now seems more likely that the US central bank may raise the federal funds rate only twice this year instead of three times, Indonesia’s financial markets have become more attractive to foreign investors as a destination to park their funds.

    “The US dollar is not king anymore this year,” Perry said during a meeting with editors of the country’s largest media groups on Monday.

    Pressure on the rupiah has also eased. The currency currently trades at 14,031 to the greenback, having appreciated 8 percent from its weakest level of 15,253 four months ago, Bank Indonesia data showed.

    Bank Indonesia took measures in concert with the central banks of Malaysia and Thailand on Jan. 2 to reduce dependency on the dollar in bilateral trade. The arrangement will involve Indonesian trade with the two countries, which amounts to about $33 billion per year, being settled in the countries’ respective currencies, instead of the US dollar.

    Indonesia’s current-account deficit, the main culprit for the weakness in its currency, is expected to narrow to 2.5 percent of gross domestic product this year, compared with 3 percent last year.

    American multinational investment bank Morgan Stanley said lower oil prices should help Indonesia lower its current-account deficit.

    “With Brent down 36 percent from its September highs, we should see some relief on the trade balance, which has been weighing on the current account and, in turn, [become] a drag on confidence in equities and performance,” analysts Sean Gardiner and Aarti Shah wrote in a recent note to clients.

    They said oil prices, with the combined effects of the election stimulus, recovering loan growth, dovish monetary policy and rising company earnings have cemented Morgan Stanley’s bullish views on Indonesian stocks.

    The New York-based bank’s top picks include conglomerate Astra International, state-owned gas utility company Perusahaan Gas Negara, state-owned telecommunications company Telkom Indonesia, and lenders Bank Central Asia and Bank Mandiri.

    Bank Indonesia is confident that the country’s economy may grow by between 5.0 percent and 5.4 percent this year, compared with an estimated 5.2 percent last year. Household consumption is also expected to expand by between 5.1 percent and 5.5 percent and investment by between 6.5 percent and 6.9 percent, the central bank governor said.

    Perry said bank loans will maintain their expansive pace of 12 percent this year, in line with an increase of between 8 percent and 10 percent in third-party funds.

    However, one source of concern this year is lower commodity prices, which will affect Indonesia’s export earnings. Perry said the country should therefore increase its exports of manufactured goods, seek new markets for its products and encourage tourism.

    He said Bank Indonesia is comfortable with its current policy and that it can afford to maintain its benchmark rate until March.

    “We are optimistic that 2019 will be better than 2018,” Perry said.

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  • Malaysia’s GDP growth to ease to 4.7% this year: Moody’s

    Malaysia’s GDP growth to ease to 4.7% this year: Moody’s

    Malaysia’s real gross domestic product (GDP) growth is expected to recede to 4.7% in 2019 after averaging at around the 5% mark between 2015 and 2018 on the back of external headwinds, according to Moody’s Investors Service. For 2020, the economy is projected to moderate further to 4.5%. The rating agency foresees external headwinds from trade protectionism to weigh on trade activity, while the review of infrastructure projects and slowdown in public spending will also prove to be a further drag to growth.

    “Nevertheless, economic expansion will still stay stronger than the median average for A-rated sovereigns, even taking moderating growth into account,” it opined.

    Moody’s said Malaysia’s credit profile, which is rated at “A3 Stable” reflects its large and diversified economy with healthy medium-term growth prospects, and relatively high government debt that is partly offset by a favourable debt structure and large domestic savings.

    It pointed out that the govern-ment’s recent fiscal policy choices, particularly in abolishing the goods and services tax, will narrow its revenue base and reduce fiscal flexibility – while its debt burden which is significantly higher than the A-rated median, will remain a credit constraint.

    “However, deep domestic capital markets and high savings provide a stable funding pool for the government’s debt, and partly offset these fiscal weaknesses. A solid institutional framework that includes effective monetary policy supports the country’s credit profile,” Moody’s said.

    It also noted that pervasive corruption will likely to remain a challenge for the government, which will also undermine policy effectiveness.

    Moody’s said that given a stable outlook of the sovereign rating, a change in the rating is unlikely in the near term, but could face upward pressure if the scope for fiscal consolidation increases.

    Conversely, the rating agency said it would consider downgrading the sovereign rating in the event of weakened fiscal prospects, increased debt burden, growing political tensions and diverging views within the government, which could undermine policy effectiveness or impair the government’s ability to adhere to its fiscal consolidation objectives, potentially threatening the stability of capital flows to the country in the process.

  • Asian stocks rise again on US-China trade talks optimism

    Asian stocks rise again on US-China trade talks optimism

    Increasing optimism that China and the United States will be able to hammer out a deal to help ease their trade war provided the impetus for more gains across Asian markets today. After taking a battering in December and suffering a shaky start to 2019, confidence is slowly returning to equity trading floors, though dealers remain on edge. Federal Reserve boss Jerome Powell provided the platform for a rally last week when he said the central bank had no “preset” plan for lifting interest rates and was “listening” to markets, signalling that the pace of hikes could slow this year.

    Fear of higher borrowing rates was a major cause of last year’s stocks losses.

    The mood among dealers held this week as officials from China and the US hunkered down for trade negotiations in Beijing that have extended into a third day. US President Donald Trump on Tuesday described them as going “very well”.

    Bloomberg also reported White House sources as saying Trump is keen to get a deal done in order to boost stock markets, which he regards as a gauge of his success.

    And The Wall Street Journal said the two were moving in the right direction, with China ready to buy more US goods and services, while further talks at cabinet level were being lined up next week.

    The progress in talks “is fuelling investor optimism suggesting there might be a light at the end of the trade war tumultuous tunnel”, said Stephen Innes, head of Asia-Pacific trade at OANDA.

    Hong Kong rose 2.3% – a fourth straight gain that has seen the index put on around 5% – and Shanghai ended up 0.75%, while Tokyo closed 1.15% higher. Sydney jumped 1% with Singapore, while Taipei and Wellington were each more than 1% higher. Manila surged more than 2% and there were also gains in Mumbai and Jakarta.

    Seoul added 2% as North Korean leader Kim Jong Un visited Beijing with speculation swirling that he will meet Trump for a second summit later this year.

    The gains also come after a strong reading on US jobs creation Friday, which soothed worries that the American economy was slowing down.

    “When the dust settles, if it ever does, the fear of recession will prove to be premature,“ Bob Doll, an analyst at Nuveen Asset Management said.

    “We will have growth, yes, slowed from the 2018 pace and we will have… earnings, yes, slowed from the 2018 pace, but acceptable for investors and that will allow equity markets to move higher.”

  • US-China talks on bilateral trade to impact Malaysia’s equity

    US-China talks on bilateral trade to impact Malaysia’s equity

    The discussion between the US and China with respect to their bilateral trade would likely be the highlight for the equity market next week, says an economist. It could also be a source of market instability, said Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid. He said market players are currently worried about the turbulence across global markets.

    “Generally businesses have become more risk-averse as some countries especially China and Asean nations had recorded below the 50-point demarcation line in their manufacturing index.

    “In fact, the US ISM manufacturing index has shown a similar trend, falling by 5.2 points to 54.1 in December 2018.

    “Naturally, businesses would reduce their capital expenditure and labour hiring as they would become wary of demand prospects, so we can expect equity markets to remain weak in the near term,” he said.

    Mohd Afzanizam said the current support level is at 1,653.

    The FBMKLCI might test this level should the discussion not pan out favourably, he added.

    For the holiday-shortened week, the FBM KLCI was traded mostly lower, mainly affected by external factors such as US political uncertainties, mounting concerns over poor global growth and the talks on the potential interest rate hikes by the Federal Reserve.

    The local bourse and its subsidiaries were closed on Tuesday for the New Year holiday.

    On a Friday-to-Friday basis, the benchmark FBM KLCI settled 22.29 points weaker at 1,669.78.

    The FBM Emas Index depreciated 124.28 points to 11,413.02, the FBMT100 Index decreased 131.24 points to 11,323.34, the FBM 70 declined 67.72 points to 13,023.80, the FBM Emas Syariah Index erased 152.51 points to 11,356.91 but the FBM Ace edged up 34.23 points to 4,294.43.

    Sector-wise, the Finance Index lost 99.90 points to 17,241.79, the Industrial Products and Services Index eased 1.18 points to 165.63, while the Plantation Index was 16.84 points weaker at 6,880.90.

    Comparing Friday-to-Friday, the weekly turnover rose to 7.22 billion units worth RM4.79 billion from 5.70 billion units worth RM4.15 billion.

    Main Market volume increased to 5.17 billion units valued at RM4.37 billion versus 4.16 billion shares valued at RM3.85 billion.

    Warrants turnover advanced to 1.23 billion units worth RM282.94 million compared with 948.80 million units worth RM202.97 million.

    The ACE Market volume appreciated to 719.60 billion shares valued at RM127.20 million against 556.26 million shares valued at RM90.05 million.

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  • Korean imported vehicle sales up 11.8 percent last year

    Korean imported vehicle sales up 11.8 percent last year

    Sales of imported vehicles in Korea continued to rise last year, aided by firm demand for foreign brands and the resumption of sales by Audi Volkswagen, industry data showed Friday. The number of newly registered foreign vehicles reached 260,705 last year, up 11.8 percent from a year earlier, the Korea Automobile Importers & Distributors Association said in a statement.

    The total number of imported cars sold in 2018 is an all-time record.

    The market share of foreign cars rose to a record high of 16.7 percent last year, shattering the previous all-time high of 15.5 percent in 2015, the data showed.

    The three best-selling models were the Mercedes-Benz E 300 (8,726 units sold) and E 300 4MATIC (9,141 units) and the Lexus ES300h (8,803 units).

    Mercedes-Benz became the first imported cars to sell more than 70,000 vehicles. It took the No. 1 spot among imported cars.

    BMW, despite controversy of its engine catching fire, kept its second spot by selling 50,524 vehicles.

    Toyota took third place with 16,774.

    Seven out of 10 imported vehicles sold in Korea last month were from Germany, the statement said.

    In December alone, however, the sales of foreign vehicles fell 8.7 percent on year to 20,450, it said.

    In 2017, imported vehicle sales reached 233,088 units, up from 225,279 a year earlier.

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  • Ringgit likely to trade in cautious mode this week

    Ringgit likely to trade in cautious mode this week

    The ringgit is expected to face a challenging upcoming week as the market uncertainty over trade tensions and a slowdown in the global economy encourage investors to remain risk-off. FXTM Research Global Head of Currency Strategy Jameel Ahmad said that the local unit may face the risk of falling below RM4.15 against the greenback next week.

    “The local currency has actually performed reasonably well this week during a period of heightened market uncertainty due to concerns over a global economic slowdown in 2019, and I actually would have expected the currency to fall lower due to investor reluctance to invest in emerging markets when there is significant market uncertainty,” he said.

    He said the ringgit and its emerging market peers across the globe face significant downside risks heading into the next trading week, as global financial markets continue to be gripped by market turmoil.

    “The first few days of the new trading year have not been kind to financial markets, with a number of global stocks selling off and a “flash crash” in the currency markets leading to losses in a number of currencies including the British pound, Australian dollar and Turkish lira while the Japanese yen surged across the board,” he added.

    Although the ringgit and its Asian peers got away from the flash crash in the market unscathed, he said the prolonged risk-off environment that is hurting risk appetite is encouraging expectations that emerging markets are at risk to another round of selling off.

    “I would keep a close eye on whether the ringgit falls below 4.15 next week, because this will raise market expectations that the currency of Malaysia will gradually return to the 4.20 levels over the coming weeks,” he said.

    For the week just ended, the ringgit closed mostly lower against the US dollar with market sentiment moved by global economic uncertainties and weak Purchasing Managers’ Index (PMI) data released early this week.

    On a Friday-to-Friday basis, the local note strengthened to 4.1340/1370 from 4.1500/1550 against the greenback.

    It went down against the Singapore dollar to 3.0357/0395 from 3.0336/0384 but improved against the British pound to 5.2378/2432 versus 5.2468/2548.

    Against the euro, the ringgit jumped to 4.7144/7199 from 4.7488/7550, but eased versus the Japanese yen to 3.8260/8298 from 3.7597/7653.

  • Vietnam eyes top 15 agriculture spot in 10 years

    Vietnam eyes top 15 agriculture spot in 10 years

    “Vietnam must strive to become a top 15 country in agriculture development in 10 years,” says PM Nguyen Xuan Phuc. “In particular, the agriculture processing sector should be in the top 10,” Phuc said at a conference held by the Ministry of Agriculture and Rural Development (MARD) on Thursday. “Vietnam must strive to become a global centre for wood processing and shrimp production,” he added.

    The PM also set a 3 percent growth target for the whole sector (agriculture, forestry and fisheries), and a $42-43 billion export target for 2019.

    Phuc asked the agriculture ministry to deploy the best measures and promote innovation to achieve targets set.

    “This is a difficult and challenging task but it must be done, a political duty, if we do not do it, our people’s lives will still remain difficult,” he emphasized.

    In order to achieve the goals, the ministry should develop good legal institutions and remove obsolete ones, the PM said.

    The ministry needs to step up efforts to restructure agricultural and rural development systems, including the creation of key national and provincial products, he added.

    It should also perform well its marketing functions, namely, forecasting, assessing supply and demand, developing new markets, and brand building for Vietnamese agricultural products like rice, shrimp and wheat, in which Vietnam is “a little slow compared to Thailand and Cambodia,” Phuc noted.

    He called for enhanced application of science and technology, hi-tech, biotech, artificial intelligence and other technological breakthroughs of Industry 4.0.

    Minister of Agriculture and Rural Development Nguyen Xuan Cuong said that the sector will maintain its good form while undertaking comprehensive and synchronous reforms.

    He said the sector still has several limitations that need to be addressed, including uneven development of different segments, limited innovation of existing processes, and inadequate managerial manpower for market regulation.

    The sector would aim to build a smart industry in 2019, foster international integration, adapt to climate change, increase value additions for products and services and ensure sustainable development through building better rural areas, he noted.

    Vietnam’s agricultural growth had reached 3.65 percent year-on-year in 2018, the highest since 2012, according to the General Statistics Office.

    Last year, the country earned $22 billion from agricultural and forestry product export, and $8.8 billion from fishery shipment, respectively increasing 10 percent and 6.3 percent over the previous year, said the office.

  • Malaysian economy likely to bottom out in Q2, says AmBank Research

    Malaysian economy likely to bottom out in Q2, says AmBank Research

    AmBank Research, which anticipates further pressure on Malaysia’s economic growth in the first quarter of the year (Q1 2019), believes that gross domestic product (GDP) growth should register slight improvement in the second quarter and pick up thereafter. This is partly attributable to the low base effects as well as support coming from domestic activities and foreign direct investments, and complemented by exports as the electronics cycle slows down, added with softer commodity prices, it said in a note today.

    The research house said it foresees growth prospects remaining weak, anti-cipating Q4 2018 GDP growth to ease to around 4% to bring the full-year growth to 4.6%.

    “With our base case GDP outlook for 2019 at 4.5% with the upside at 4.8%, we foresee further weakening pressure on growth in Q1 2019,” it added.

    Malaysia’s third quarter GDP growth moderated to 4.4%, bringing about a nine-month expansion of 4.7%. Bank Negara Malaysia is due to announce Q4 GDP figures on Feb 14.

    AmBank Research highlighted that the strong foreign approved investments amounting to RM48.8 billion as of Q3 2018, which is an all-time high, is expected to support growth in 2019.

    The growth drivers are seen coming from petroleum refineries with RM17.2 billion investment being approved, followed by electrical and electronics (RM10.2 billion), basic metal products (RM5.7 billion), chemical and chemical products (RM4.6 billion) and rubber products (RM3.5 billion).

    Additionally, it said, agriculture, mining, and plantation and commodities saw a notable increase in approved investments with 54 projects as of Q3 2018, compared with 48 projects in 2017.

    Furthermore, investments in the services sector will continue to boost growth largely coming from local players with RM60.4 billion approved investments compared with RM96 billion in 2017, while foreign investments remained muted at RM9.5 billion as of Q3 2018 from RM28.5 billion in 2017.

    Commenting on the slump in the Nikkei Malaysia Manufacturing Pur-chasing Managers’ Index (PMI), AmResearch said it indicates downside risks with overall demand to be weak, thus causing companies to become less willing to hold stocks.

    The headline PMI fell to a six-month low of 46.8 in December 2018 from 48.2 in the previous month. The demarcation between expansion and contraction is 50.

    The data points to the sharpest deterioration in the health of the goods-producing sector since May. It also extended the current period of decline to two months. The drag largely came from severe reductions in production and new businesses.

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  • Malaysia’s November export growth expected to slow to 3%

    Malaysia’s November export growth expected to slow to 3%

    RAM Ratings expects Malaysia’s export growth to decelerate to 3% in November 2018, as front-loading activities that had temporarily propped up exports by 17.7% in October subside. The rush to front-load orders in October was driven by greater concerns over the planned increase in US tariffs – from 10% to 25% – on US$200 billion (RM827 billion) of Chinese imports, the ratings agency said in a note today.

    RAM is of the view that the export stimuli will remain limited over the next few months – a scenario further supported by a contraction in China’s manufacturing export orders in the last several months.

    In line with the weaker external demand, RAM expects that import growth would ease to 1.8% in November.

    Overall, the trade surplus is projected to come in at RM11.1 billion in November.

    To date, Malaysia has yet to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that came into force on Dec 30 with seven members.

    That said, RAM’s head of research Kristina Fong opined that Malaysia’s absence is unlikely to have significant implications for its trade performance in the near term, given that it already has free trade agreements (FTA) with five of the seven signatories.

    “The two remaining countries, Canada and Mexico, constitute a small share of overall exports at just 0.4% and 1%, respectively, thus limiting potential adverse trade diversion away from Malaysia,” she explained.

    Furthermore, she said this trade diversion risk is also mitigated by the fact that the tariff reductions on major goods imported from Malaysia that also overlap with key imports from other CPTPP members, is mostly less than one percentage point.

    While the direct impact of Malaysia’s absence from the deal could be muted in the short run, RAM said it could potentially cause the country to lose out over the long term as regional members in the multilateral FTA could be favoured as foreign direct investment destinations.

    “Standardised rules of origin and lower regulatory barriers brought about by the CPTPP could entice firms to more readily build up supply chains between member countries. This dynamic could in turn foster the development of new industries and global value chains and build new capacities within this alliance,” it added.

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  • Japanese cosmetics surges in export number

    Japanese cosmetics surges in export number

    Japan’s cosmetics exports are on track to surpass 500 billion yen ($4.53 billion) for the first time in 2018, marking a sixth consecutive record year, thanks to Asian tourists who continue to buy these products after returning home. Exports in the January-November period grew 44% on the year to 482.8 billion yen, according to a tally of 16 types of cosmetics compiled from trade data by Nikkei. Demand for gifts tends to boost exports in December, and with major cosmetics makers’ plants running at high capacities, the full-year figure is expected to reach around 520 billion yen.

    Mainland China was the top buyer from January through November, accounting for 34.9% of exports by value, followed by Hong Kong at 25.9%, South Korea at 10.3%, Taiwan at 7.3% and Singapore at 7.3%. Asia accounted for 90% of the total.

    Japan’s cosmetics exports have tripled in the last four years along with a rise in visitors to Japan. Exports exceeded imports for the first time in 2016 as inbound tourism creates new customers for high-quality Japanese goods who continue to buy them online or in stores upon returning home.

    Cosmetics exports are likely to keep climbing in 2019. China will implement in January its first e-commerce law, which will require domestic online platforms to register with the government. With the crackdown on illegal marketing, direct exports of Japanese cosmetics are expected to increase as smaller Chinese retailers that sell goods procured directly from shops in Japan decline.

    Top cosmetics makers are also actively expanding their sales. Shiseido plans to begin in 2019 officially selling new products in China from its namesake mainstay brand, which launched worldwide this fall. The company will open a facility for collaboration with Alibaba Group in Hangzhou from January and jointly develop products with the Chinese e-commerce empire.

    Kao plans to double the number of stores in China carrying its popular Freeplus skin care brand to more than 2,000 by 2020. It will also cultivate sales for its makeup brand Kate, which launched a Chinese marketing campaign in December. Kose is accelerating the online sales campaign it began in China this autumn for its luxury brand Decorte.

    Japanese cosmetics makers are increasing the capacity of domestic plants to meet the surging export demand. Shiseido plans to bring a new domestic factory online in 2019 for the first time in 36 years, in Tochigi Prefecture, to produce more items like skin care products. It will also begin operations at a new facility in Osaka Prefecture in 2020.

    Kao will roughly double production for its Freeplus brand from 2017 levels, too, by investing in its main factory in Kanagawa Prefecture. Boosting domestic production is likely to encourage exports further by increasing supplies of “made-in-Japan” cosmetics.

  • Indonesia Posts Narrowest Budget Deficit in 6 Years in 2018: Finance Minister

    Indonesia Posts Narrowest Budget Deficit in 6 Years in 2018: Finance Minister

    Indonesia posted the smallest fiscal deficit in six years in 2018 and less than initially projected, despite turbulence in its financial markets due to capital outflows, Finance Minister Sri Mulyani Indrawati said in a Facebook post. The estimated budget deficit last year was equal to 1.72 percent of gross domestic product, narrower than both the government’s original plan of 2.19 percent and the latest estimate of 1.83 percent, Sri Mulyani said in a message posted late on New Year’s Eve.

    As a percentage of GDP, that was the smallest since 2012, the former World Bank managing director said.

    The 2018 budget also has a Rp 4.1 trillion ($283 million) surplus in its primary balance, or budget balance before interest payments, which Indrawati said was the first surplus since 2011.

    “We have done our duty to manage government finances well. The year 2018 was not an easy year with fluctuations in the global economy, commodity prices, capital flows and exchange rate,” she said, while also noting higher interest rates at home and globally.

    The rupiah plunged to its weakest in 20 years in 2018 due to capital outflows linked to worries about its twin deficits, US interest rate increases and concerns about the fallout for Asia from the US-China trade war.

    However, inflows towards the end of the year bounced it back and the currency closed the year 6 percent weaker compared with end-2017.

    Sri Mulyani said 2018 income from taxes and other revenue sources grew “high and healthy.” She previously said higher oil prices and a weaker rupiah had resulted in higher government revenues.

    The minister is expected to hold a news conference on budget realization on Wednesday.

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  • India eyes $100 billion FDI in next two years

    India eyes $100 billion FDI in next two years

    India will aim to receive $100 billion in foreign direct investments in the next two years and special industrial clusters are being created for countries like Japan, South Korea, China and Russia where their companies can invest and operate, Union minister Suresh Prabhu said. The commerce and industry minister said his ministry has also identified sectors and countries which holds huge potential for investments in India.

    “I have given a target. $100 billion of FDI should come from different sectors into India. It will not happen in one year. We have identified companies, sectors and countries and now we are going for road shows to attract investors,” Prabhu said.

    He said India would remain a top destination for foreign investors in 2019 and the ministry would look at all sectoral issues that may come come in the way to attracting overseas investments.

    “For countries like Japan, South Korea, China and Russia, we are creating industrial clusters where they can invest and operate,” Prabhu said.

    The minister said China has agreed to set up industrial parks in India and the Chinese authorities have been asked to give a list of companies that are willing to set up factories in India.

    Similarly, India would be happy to welcome firms from Europe and the US who want to move out of other countries and set up manufacturing bases in India, Prabhu said.

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  • Vietnam GDP growth tops 7 pct, highest in a decade

    Vietnam GDP growth tops 7 pct, highest in a decade

    Vietnam’s GDP growth of 7.08 percent this year retained its status as one of the best performing economies in the world. It was the highest growth the country has experienced since 2008 and compared with the median estimate of 6.9 percent in a survey of 12 economists.

    The scale of the economy at present value is over VND5.53 quadrillion ($237.38 billion), with average GDP per capita at $2,587 per person, a $198 increase over 2017, Nguyen Bich Lam, head of the General Statistics Office, said Thursday afternoon.

    According the office, the agriculture, forestry and fisheries sector grew by 3.76 percent this year, and contributed to 8.7 percent to the country’s GDP. Corresponding figures for industry and construction sectors were 8.85 percent and nearly 49 percent; and that of the service sector, 7.03 percent and approximately 43 percent.

    Lam said that the consumer price index (CPI) in December 2018 fell by 0.25 percent compared to the previous month. On average, CPI in 2018 increased by 3.54 percent, well below the 4 percent target set by the National Assembly.

    Export turnover for the year is estimated at over $244.7 billion, up nearly 14 percent compared to 2017.

    The FDI sector (including crude oil) still accounts for nearly 70 percent of export turnover, at more than $175.5 billion.

    On the other hand, Vietnam imported more than $237.5 billion the whole year, up 11.5 percent over 2017.

    Overall, in 2018 Vietnam achieved a trade surplus of $7.2 billion.

    “The quality of economic growth has improved,” Lam said.

    The GSO director general explained that labor productivity this year saw an increase of nearly 6 percent compared to 2017, at VND102 million (nearly $4,512) per person.