Economy

Bank of Japan Upgrades Economic Outlook for Six Regions

Published

1 year ago

October 20, 2023

Bank of Japan Upgrades Economic Outlook for Six Regions

The Bank of Japan (BOJ) has revised its economic outlook upwards for six regions, including Kanto-Koshinetsu, as per the quarterly Sakura report released on Thursday. This upgrade is attributed to robust domestic demand and a resurgence in inbound tourism. Despite a slowdown in overseas recovery and inflation pressures, assessments for Tokai, home to Toyota Motor (NYSE:) Corp., Kinki, and Kyushu-Okinawa remain steady.

Private consumption, a pivotal component of Japan’s economy, continues to demonstrate resilience amidst these challenges. The BOJ and economists emphasize the necessity for sustainable wage growth to maintain a price and wage cycle in the face of inflation. To mitigate inflation’s impact on households, the government is currently developing a new economic package.

The Sakura report also highlighted the positive impact of strong auto exports on the economy, facilitated by easing parts shortages which have enabled automakers to increase production.

In addition to increased inbound demand from tourists, other factors contributing to the upgraded economic assessments include higher service consumption such as travel and food, recovery in corporate production, and firm capital investment. Even with rising prices, demand remains strong from both foreign and domestic customers. However, due to increased accommodation rates, consumers are shifting towards cheaper private brand products and reducing unnecessary purchases.

Yoshiki Okamoto, the Sapporo Branch Manager, noted that tourism is driving personal consumption. He also mentioned the construction of a large-scale plant in Hokkaido for developing and mass-producing cutting-edge semiconductors. This signals firms’ business fixed investment amid rising growth expectations.

The insights from the Sakura report will inform the BOJ’s policy-setting meeting later this month. Future economic conditions will hinge on improvements in employment and income situations, corporate wage increases, and securing human resources with voices advocating for wage increases within successful companies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Economy

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

Published

12 months ago

December 26, 2023

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.

The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.

Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.

“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.

Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.

“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.

The bank will next convene to set its benchmark rate on Feb. 16.

The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.

Economy

China identifies second set of projects in $140 billion spending plan

Published

12 months ago

December 25, 2023

China identifies second set of projects in $140 billion spending plan

© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo

SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.

With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.

The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.

China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.

The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.

“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.

The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.

($1 = 7.1315 renminbi)

Economy

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

Published

12 months ago

December 25, 2023

Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.

“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.

Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.

“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.

The bank will next convene to set its benchmark rate on Feb. 16.

The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.