NEW DELHI - India's new budget for FY14 (year ending March 2014), presented today, delivers on three counts, according to an analysis by BBVA Bank: 1) it delivered a credible fiscal consolidation path; 2) it focussed on the quality of deficit reduction; and 3) it balanced austerity with populism without undermining economic growth. The Government said the FY13 fiscal deficit was within the targeted 5.3% of GDP (at 5.2%), with a promise to reduce the deficit to 4.8% of GDP in FY14 and to 3.0% by FY17.
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MUMBAI - The troubles for the Indian banking system are likely to increase in the next 12 months due to slow economic growth and sluggish fiscal reforms. However, the situation is likely to improve in the fiscal year ending March 31, 2015, according to ratings agency Standard & Poor's. The report notes that the performances of both the Indian economy and the corporate sector are likely to start improving in fiscal 2014.
BEIJING - Political contacts across the Taiwan Strait "should be given a proper level of attention" to come to grips with the thorny issue of "one China", according to Lien Chan, an honorary chairman of Taiwan's ruling Kuomintang. Speaking to reporters after meeting with China's top leader, Xi Jinping, in Beijing, Lien said the two sides can start with experts and non-governmental organisations such as think tanks to tackle more difficult political issues.
HANOI - Vietnam’s export trade for January and February grew by 23.9% against the same period of 2012, year-to-date, while imports grew by 10.2%. The trade surplus for the period widened to US$900 million, up from an upwardly-revised figure of US$776 million in January. February figures showed a ninth straight month of surpluses.
BEIJING - Russia is set to supply China with natural gas in a strategic deal reached by the Vice-Presidents of the two countries. Russia agreed to provide an annual supply of 38 billion cu m of natural gas through an eastern pipeline to China. The deal builds on a framework agreement from 2009 where Russia agreed to deliver 70 billion cu m annually for 30 years, starting in 2014. China consumes roughly 145 billion cu m of natural gas, and will import 78.5 billion cu m by 2014. The announcement comes a few weeks before Xi Jinping’s scheduled state visit to Moscow.
BEIJING – The China Research Centre on Aging says the number of China’s elderly will reach 202 million in 2013, accounting for 14.8% of the total population. Defined as people over 60 years old, the elderly population has grown by 8.91 million people year-on-year. The announcement increases fears of a shrinking working population and an increasing dependent population, with dependents increasing from 44.62% of the total population in 2012 to 45.94% in 2013.
JAKARTA - President Susilo Yudhoyono is to nominate Agus Martowardojo, the current Minister of Finance, as Bank Indonesia’s next Governor, replacing Darmin Nasution, whose term expires in May. The nomination is subject to Parliamentary approval (Agus was turned down by Parliament for the post once before, in 2008), and raises questions about his replacement at the Ministry of Finance.
BEIJING - Economic growth in China is expected to increase by 0.43% from 2012 to reach 8.23% in 2013 according to Xiamen University and the Economic Information Daily, a subsidiary of Xinhua. Their report says 2013 export growth should increase almost 5% to 12%. Import growth is also due to increase, from just 4% last year to almost 18% this year. Inflation is predicted at 3.11%, up from 2.6% last year. The report is in line with Government projections, but analysts at Nomura argue that 8.23% is too high an expectation, indicating a figure around 7.7% is more likely.
TAIPEI - Taiwan's economic growth could increase to more than 4% in 2013 if more emphasis was placed on investment and consumption, according to former Vice President Vincent Siew. He believes the economy can perform better than the Government's forecast of 3.59% growth – which compares with just 1.26% in 2012. Siew said he had seen an increase in investment activities in the private sector, and that this will be followed by an uptick in consumption. The former Economics Minister said Taiwan's finance industry should be expanded to contribute more to GDP.
BEIJING - One of the final stages of a railway linking Kunming in south-western Yunnan with Vietnam has become operational. The railway, between Yuxi and Mengzi, both in Yunnan, is part of the Eastern line of the planned Pan-Asia Railway Network which will provide rail links from China to Singapore. The railway is on track to open within the year. The rail link is planned to open up China’s south west to greater trade with ASEAN, which could make Kunming an ASEAN-focussed regional economic hub.
BEIJING - China has surpassed Sweden to become Volvo’s second-largest market after the US. January sales reached 4,776 units, up 75.8% from January last year, although it is unclear if this is owing to weak sales in January 2012. Volvo said it sold 29,614 vehicles across the globe in the same month. The imported mid-sized S60 sedan and imported SUV XC60 both set records for single month sales in China. Ford also reported a 98% increase in sales from the holiday-shortened sales period of January 2012, delivering 61,475 vehicles to China in January 2013.
MELBOURNE – ANZ has just published the third edition of its RMB handbook, translating that the latest developments in the offshore Chinese Renminbi (RMB) market mean to business in practical terms.
TOKYO - The earnings of Japan-based industrial corporations are likely to be a mixed bag in 2013, as was the case in 2012, with performance continuing to vary across sectors, says Standard & Poor's. “We believe pressure on our ratings on these companies remains strong in some industries given that the outlook on the long-tern corporate credit ratings is negative or the ratings are on CreditWatch with negative implications for over 30% of Japanese industrial companies we rate,” S&P says in a new report.
SINGAPORE – In its proposed budget for 2013-14, Singapore’s Ministry of Finance continues its focus on structural issues, proposing a fiscal surplus of SGD2.4 billion (0.7% of GDP) against the larger-than-expected SGD3.9 billion surplus in 2012. Inclusive long-term growth through productivity improvements and foreign worker curbs remain the major pillars of the budget, with rules on foreign works to be tightened further (ATI).
BEIJING – China’s software industry earned more than RMB1.3 trillion in revenue in the first seven months of 2012, up 25.4% on-year, Government data shows. China’s software business is flourishing in the nation's western regions, including Chongqing, Sichuan and Shaanxi, the Ministry of Industry and Information Technology said. Data released by the Ministry also showed that the surge in revenues was accompanied by a 12.5% rise in export value for the sector in the same seven-month period.