Asia

Foreign exchange reserves across the region have taken a hit as central banks grapple with strong greenback and China’s defence of its yuan Asian central banks have sold more than $30 billion of foreign exchange reserves in the past two months in a largely unsuccessful attempt to stabilise their currencies, analysts at JPMorgan said. Currencies across the region have been highly volatile all year, hemmed between China’s defence of its yuan and a surging dollar backed by a progressively more hawkish Federal Reserve. But that significant level of intervention, which excludes China, has done little to calm investors worried about diminishing returns in emerging markets as dollar yields rise and currencies weaken. Official data showed a net outflow of $2.7 billion from Asian ...

Chinese policymakers “seem to be ignoring everything they learned” from Japan’s 15-year period of economic stagnation, one official warned Increasing deflationary pressures and a deepening real estate crisis have put the world’s second largest economy on the brink of “Japanization,” analysts have warned. The term describes Japan’s 15-year period of low growth and deflation after the burst of an asset-inflated bubble in the late 1990s. “Under the Xi administration, China probably shifted its attention away from economics,” said Hiroshi Wanatabe, Japan’s former top currency diplomat, who retains close ties with incumbent policymakers. Wanatabe recalls how Chinese policymakers eagerly studied ways to avert a Japan-style burst of an asset bubble that led to prolonged deflation and...

The World Bank has warned that Pakistan is in its tipping point on poverty as 40% of its population, accounting for 95 million Pakistanis, lives below the poverty line. This warning comes ahead of the elections. The Bank’s policy note, recently released, is meant to act as a guide for the new government that will take office after the elections for policy reforms. Underlying the Bank’s suggestions for the future is the fact over 12.5 million Pakistanis have fallen below the poverty line last year and who are struggling to meet their daily needs. The latest statistics show that poverty rose from 34.2% to 39.4% with more people falling below the poverty line of US$3.65 per day income level. With Pakistan facing serious economic and human development crises it is abundantly clear that the co...

Sri Lanka has confirmed that it has reached a deal with China, to restructure $4.2bn (£3.4bn) of debt. It has been trying to reach similar deals with a number of creditors to unlock the next tranche of a bailout. Sri Lanka defaulted on its foreign debt in May 2022 amid its worst financial crisis in decades. Soaring prices and shortages of essential goods sparked nationwide protests last year. Why is Sri Lanka in crisis? Is the worst over for Sri Lanka's economic crisis? "We thank China Exim bank (Export and Import bank) for the support in resolving our country's debt situation," Sri Lanka's Finance Ministry said in a statement. "This agreement constitutes a key milestone in Sri Lanka's ongoing efforts to foster its economic recovery." The Ministry gave no further...

The headworks of Nepal's most expensive infrastructure project on the Melamchi were damaged in a debris flow caused by heavy rain on melted glacial deposits in July 2021. The COP28 meeting in November will have to discuss addressing loss and damage from climate breakdown. Photo: SHIVA BASKOTA A key component of international climate negotiations is finance for adaptation measures, and like other developing countries, Nepal faces difficulties in this regard. The next climate summit (COP 28) in Dubai 30 November – 12 December will be crucial to make the country’s concerns clear. The Conference of the Parties (COP) is an annual conference under the United Nations Framework Convention on Climate Change (UNFCCC) and brings together member nations for coordinated response to address globa...

As reported by India Narrative on September 16 that China’s interest in the China-Pakistan Economic Corridor projects in Pakistan has dimmed, the Express Tribune, a leading Pakistani daily reported on Tuesday that the CPEC is in doldrums. Owing to deep economic stress in both the countries, China has not agreed to further expand cooperation in areas of energy, water management, and climate change under the CPEC. Besides, the daily reports, Islamabad has also agreed to give in to many Chinese demands like establishing a coal-fired power plant in Gwadar and a number of other Chinese demands. Reports from other Pakistani sources indicate that one of the reasons behind CPEC projects getting installed is the acute paucity of dollars with the Pakistani government and thus purchasing...

Pakistan is facing a critical moment where it must decide whether to continue with policies thathave led to high poverty rates and economic hardships, or make necessary changes for a brighterfuture, according to the World Bank. The country is dealing with issues such as inflation, risingelectricity prices, climate shocks, and insufficient resources for development. Pakistan's humandevelopment outcomes are also poor, with a high number of children out of school and stuntedgrowth. The World Bank is urging the upcoming government to make policy shifts to addressthese challenges. Pakistan is in its tipping point crisis where it should decide to remain a laggardwith 40 per cent population living below the poverty line under elite captureand policy decisions driven by strong vested interests...

The economy is mired in a range of internal and externally-induced traps. Brokering trade and peace with India may help The warning has been sounded before but this time it seems Pakistan’s economy is headed for the rocks. Even the smartest economists can’t see a way forward. One suggestion almost impossible to implement came from IMF chief Kristalina Georgieva. “Please collect more taxes from the wealthy and please protect the poor people of Pakistan,” she implored, and there was no mistaking the desperation in her voice. Some 40 per cent of Pakistanis — 95 million — now are estimated to be below the poverty line. Pakistan won itself a brief respite with a conditional new $3-billion IMF loan in July. But that’s only a temporary fix and the country is no closer to resolving its deep...

India’s growth prospects are bright, with its potential role in developing infrastructure, manufacturing, and services in expanded G-20. In brief The expanded G-20, including the African Union, represents nearly 90% of global GDP and close to 80% of the world's population. While many G-20 countries face slowdown and high inflation, India’s economic growth prospects appear bright with better inflation management, and lower government debt. As per the IMF, India is poised to lead global growth, contributing 15% to it in 2023. Key features of expanded G-20 group: share in GDP and population The expanded G-20 group of countries with the addition of the African Union (AU) constitutes a large complex group of countries and country groups that accounted for 88.6% of global GD...