The next few months will tell us a lot about the shape of the coming global recovery. Despite ebullient stock markets, uncertainty about COVID-19 remains pervasive. Regardless of the pandemic’s course, therefore, the world’s struggle with the virus so far is likely to affect growth, employment, and politics for a very long time. Let’s start with the possible good news.
Surging crude prices are posing another headwind for the world economy after United Sates (US) President Donald Trump’s “zero” pledge on Iran oil sales.Brent crude has risen about 33 percent this year and is close to the highest in six months. While higher prices due to strong demand typically reflects a robust world economy, a shock from constrained supply is a negative.Much will depend on how sustained the spike proves to be.
Money has been tight for the ordinary Filipino this year. Over the past few months, the Philippines has seen its inflation rate rise rapidly. The latest data from the Philippine Statistics Authority reveals that the rate of inflation had reached a whopping 6.7 percent in September.
After two years since his landslide presidential victory, Philippine President Rodrigo Duterte could finally be facing his biggest challenge yet. No, it is not his controversial war on drugs which Human Rights Watch says has claimed more than 12,000 lives. Nor is it his abysmal human rights track record.At the moment, the biggest concern for many ordinary Filipinos is the economy – a concern most likely shared by Duterte as well.
The question facing policy makers in the Philippines is not whether to raise interest rates for a third time in a row, but by how much.A booming economy, surging inflation and pressure on the currency are setting the stage for a 50 basis-point increase in the benchmark rate to four percent on Thursday, according to 17 economists surveyed.
Southeast Asia’s central bankers are taking diverging policy stances even as their economies get slammed by the same headwinds.United States (US) dollar strength, higher oil prices, and global monetary policy tightening are adding pressure on key emerging markets to protect their currencies and curb outflows. Amid all that volatility, central banks still have their inflation targets to consider.
Indonesia’s central bank signaled the end of monetary policy easing as it focuses on inflation risks, such as rising food and oil costs.After keeping the benchmark interest rate at 4.25 percent – as forecast by all 24 economists surveyed by Bloomberg – Assistant Governor Dody Budi Waluyo indicated there’s limited room for rate cuts after eight reductions in the past two years.“The monetary stance remains neutral,” he said. “We will bring inflation to meet the target of 3.5 percent.
Thailand raised its minimum wage nationwide for the first time in five years, as the country’s military government tries to tackle lingering income inequality.The wage will climb from April by 5 baht (16 cents) to 22 baht per day, depending on location, Jarin Chakkaphark, permanent secretary for labor, said in a briefing late Wednesday in Bangkok.
As central banks around the globe get ready to pull the trigger on interest rates, Southeast Asia’s biggest economy is in no rush to do the same.After reducing interest rates eight times since the beginning of last year, most recently in August and September, it’s unclear how Bank Indonesia will proceed next year: economists are split on whether policy makers will hike, keep rates unchanged or ease some more.“Strong growth and higher inflation, coupled with continued Fed rate hikes, should pu
Singapore’s central bank chief said while inflation is still well below the historical average, policy makers need to be proactive if a stronger economy results in a pickup in price pressures.Inflation will climb at some point if economic growth continues to strengthen, and under those circumstances, the central bank – like others around the world – needs to be forward-looking, Ravi Menon, managing director of the Monetary Authority of Singapore, said in an interview at the bank’s headquarter
Philippine central bank Governor Nestor Espenilla said contained inflation means there isn’t a need to increase interest rates in the near term."Right now, there is no need to move policy rates looking at the inflation outlook," Espenilla said in Washington where he was attending the annual International Monetary Fund meetings.