Asia

The World Bank has issued a warning that the coronavirus pandemic, along with Russia's conflict in Ukraine, has led to a drop in the global economy's potential for long-term growth. The situation could result in a "lost decade", which would leave fewer resources for addressing climate change and an increase in poverty. This is occurring alongside banking crises that pose a threat to global economic growth. The World Bank's latest report predicts that potential global output will reach a 30-year low of 2.2 percent per year between 2023 and 2030, with developing economies expected to experience an even greater decline, falling from an average annual rate of 6 percent to 4 percent. World Bank officials have cautioned that the "golden era" of development appears to be coming to an...

The recent financial troubles following the emergency takeover of Credit Suisse and the collapse of three US lenders have led to concerns over the potential risks to Japan's banks from the fallout. Shares in Japan's banks have been among the hardest hit in Asia since the crisis emerged this month. But, Japanese financial regulators and industry heads have said the nation's financial system is sound, and analysts have been working to reassure worried bank investors. Here are four reasons why fears of a banking crisis in Japan are, for the most part, overblown. Firstly, Japanese banks have strong balance sheets, and although they are sitting on large paper losses on foreign bonds, including Treasuries, they tend to carry foreign bonds as available for sale, rather than held to maturity, whi...

This weekly round-up brings you the latest stories from the world of economics and finance. Top economy stories: IMF ups its global economic growth forecasts; US, ECB and UK raise interest rates; Global factory activity contracts again; India plans major boost to capital spending. 1. IMF raises growth forecasts for 2023 The International Monetary Fund (IMF) has made a slight increase to its global growth outlook for 2023, due to "surprisingly resilient" demand in the United States and Europe, easing energy costs and the reopening of China's economy after Beijing abandoned its strict COVID-19 restrictions. It still sees the pace of global growth falling this year compared with 2022, but by a smaller margin than it predicted in October. The IMF is now forecasting 2.9% gro...

Tokyo Electron, a leading semiconductor equipment manufacturer, has announced a better-than-expected outlook for the fiscal year ending March 2023, despite the ongoing impact of China's chip sanctions. The company reported a net profit of 102.5 billion yen ($928 million) in the nine months to December, up from 51.5 billion yen a year earlier. Sales increased 34% to 823.5 billion yen, boosted by strong demand for equipment used in the production of semiconductors, flat-panel displays and solar cells. Despite the positive results, the company noted the ongoing impact of China's chip sanctions, which have affected the industry as a whole. The sanctions, which were imposed last year, restrict Chinese companies from buying high-end chip-making equipment from Japan and other countries, in...

Central Asian airlines are seizing opportunities from Russia’s closed airspace, with airline traffic into the region booming in the year since Russia’s invasion of Ukraine, executives and analysts said. Flights in and out of the region have surged as airlines that previously flew over Russia are now passing through or flying over central Asia to get to Asia and the Middle East. New airlines, bolstered by government support, have also popped up to capitalise on the new traffic. “A lot of people have moved from the conflict area into Central Asia...they have the linguistic affinity so we’re seeing more flights into this area and we’re seeing more dynamic economies,” said Raphael Haddad, the head of JetCraft Commercial, a firm that sells aircraft globally and in the region. Since th...

Exports to Russia likely to increase as domestic manufacturing remains non-competitive Russia’s Central Bank has forecast that the conditions for the importation of goods into Russia over the period 2023-26 have been significantly improved, with the bank predicting that 2023 import rates will be similar to pre-sanctions 2021. However, this has an immediate impact on the much-discussed import substitution structures, which many businesses in Russia and overseas have invested in. How will these alternatives face an improved Russian import environment? This depends upon what and from where the Russian economy is going to import in the coming years in direct and indirect ways. In principle, Russia’s relationship with foreign markets may increase, rather than decrease. We discuss the imp...

Sri Lanka‘s government said on 28 February it was banning strikes in several key sectors as its economic crisis continues. The move comes a day ahead of a planned one-day national stoppage called by unions to protest painfully high taxes and utility bills. Anger towards president Ranil Wickremesinghe is growing. His government has slashed spending and hiked taxes to secure an International Monetary Fund (IMF) bailout after more than a year of economic and political upheaval. Wickremesinghe’s office said he used his executive power to invoke an “essential services” order. The order effectively outlawed the planned trade union strikes. A statement said he declared: Anyone defying the essential services order risks losing their job. Sri Lanka’s government has ...

External Affairs Minister S Jaishankar on Thursday advised Pakistan to "fix theirplans and decisions in the favour of people." During the media interaction at the inaugural session of the Asia EconomicDialogue 2023 in Pune today, he said, "The country must fix its social andpolitical issues. If I plan any scheme or decision for a country, I must think aboutthe people's perspective too. What they want, they (Pakistan) must think aboutthis. If any country facing a deep economic crisis, not pointing only Pakistan but,other countries too. They must fix their plans and decisions in the favour ofpeople." Notably, Pakistan's economy is in shambles and the country is holding virtualtalks on the Memorandum of Economic and Financial Policies (MEFP) in order tostrike the staff-level agreement. ...

For the past few years, India has invested heavily in the production of electronic goods, and in December 2022, Apple became the first firm from the nation to export iPhones worth USD 1 billion in a single month.  December set a new month for the sector, according to an article in the Economic Times, with shipments of mobile phones totaling more than Rs 10,000 crore. According to Rajeev Chandrasekhar, the minister of state for electronics and IT, the goal of Prime Minister Narendra Modi is for mobile phone exports to rank among India's top 10 exports by 2023. Rajeev Chandrasekhar said that the government would take all the measures that are required for boosting the electronics manufacturing ecosystem in the country, in an interview with news agency PTI. In 2023, the government...

New rules in China on asset classification will improve transparency by making it tougher for the country's banks to hide problem loans, S&P Global Ratings said in a Feb. 14 note. The updated financial asset risk classification methods for commercial banks, announced by the People's Bank of China on Feb. 11, will widen the assets that must be officially reported as nonperforming, Ratings said. The revised rules will apply to all new businesses from July 1. There is a grace period until 2025-end for existing portfolios. "China's risk classification of problem assets will get stricter under the new rules," S&P Global Ratings credit analyst Ming Tan said in the note. "This will minimize opportunities for regulatory arbitrage." Chinese banks' reported nonperforming loans...