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Posts Tagged ‘stimulus’

Japan’s lower house approves 60 billion dollar stimulus

In Uncategorized on November 16, 2010 at 8:25 am

US Fed promises stimulus to help slowing recovery

In Uncategorized on August 11, 2010 at 7:20 am

 The US Federal Reserve promised more stimulus spending to prop up the economy, as it warned the recovery had slowed.

Facing pedestrian growth rates and high joblessness, the Fed vowed to renew crisis-era measures that pumped hundreds of billions of dollars into ailing markets.

Members of the Federal Open Market Committee downgraded their assessment of the health of the world’s largest economy, saying growth “has slowed in recent months.”

The 10-member committee warned “the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”

In a sign of how seriously Washington is viewing the slowdown, the Fed promised to maintain crisis measures, which had been due to end.

A trader works on the floor of the New York Stock Exchange.

The bank had battled the worst recession in a generation by buying up US debt, mortgage-backed securities and other financial products to lubricate markets.

The Fed said it would now reinvest cash from maturing mortgage bonds rather than shrink its two-trillion-dollar portfolio as planned — essentially resuming crisis-era spending.

“To help support the economic recovery in a context of price stability, the committee will keep constant the Federal Reserve’s holdings of securities at their current level,” the FOMC said.

The move was seen as “an unambiguous downshift in the Fed’s assessment of… the current state of the economy,” according to Ian Shepherdson of High Frequency Economics.

In early August, the Fed held around 1.2 trillion dollars in mortgage-backed securities, which it had hoped to whittle away.

“Prior to this new directive from the FOMC, the balance sheet was set to shrink by as much as 200 billions dollars per year,” said Stephen Gallagher and Aneta Markowska of Societe Generale.

The pair added that the Fed’s move might help stimulate a moribund housing market: “The Fed’s investments in longer-dated Treasury debt should…lower mortgage and other borrowing rates.”

In June, the Fed had said the economic recovery was “proceeding” despite headwinds and would remain “moderate for a time.”

But against stiff headwinds, the bank on Tuesday promised to keep interest rates at “exceptionally low levels…for an extended period.”

Stock markets pared loses shortly after the announcement, with the Dow index replacing triple digit losses to close down 55 points, or around half a percent.

But it was not welcomed universally.

“The Fed is running scared,” said Stephen Stanley of Pierpont Securities, accusing the bank of “exacerbating the environment of uncertainty by conducting policy erratically and feeding the sense of fear by wetting the bed over a soft patch (in the economy).”

But the Fed’s move also seemed unlikely to end speculation about the need for more robust action.

“Simply reinvesting the proceeds from maturing agency securities will not provide much additional stimulus,” said Michael Gapen of Barclays Capital.

“Should the outlook continue to worsen, then the Fed will likely initiate a new round of asset purchases.”

Source: SGGP

ASEAN should prepare to wind down stimulus measures: leaders

In Uncategorized on April 9, 2010 at 8:41 am

Southeast Asian leaders said Friday their governments should prepare to phase out economic stimulus measures introduced during the global financial crisis as their economies recover.

Southeast Asian leaders hold hands during the opening ceremony for the 16th ASEAN Summit in Hanoi April 8, 2010. (AFP Photo)

The Association of Southeast Asian Nations (ASEAN) leaders said at the end of an annual summit in the Vietnamese capital Hanoi that they were confident the support measures could be wound down without damaging economic recovery.

“We affirm the need to start working on mechanisms to reverse the fiscal and monetary stimulus and then phase out these policy accommodations,” the leaders said in a joint statement.

They said they are “fully confident that at the appropriate time we will be able to do so effectively to ensure sustained recovery and development”.

ASEAN’s export-dependent economies were battered by the financial crisis that began in the United States in late 2008 and lasted well into last year.

Like the rest of Asia, ASEAN governments rolled out massive economic stimulus packages and policies to boost domestic spending and eased credit lines to help the region emerge from the crisis.

But the measures, in large part spending packages to boost domestic consumption in order to take the slack from falling exports, have strained government budgets.

The leaders said that as market conditions improve and regional economies begin to recover, governments must reconsider the support mechanisms and let the private sector lead the growth.

“We will maintain monetary and fiscal support while preparing for an orderly unwinding of expansionary policies until the recovery is on a firm footing,” they said.

“We note that as market conditions and the economic outlook are improving, we need to reconsider the continued support of monetary and fiscal policies for sustained recovery and resumption of private credit flows in our economies.”

International Monetary Fund (IMF) deputy managing director Naoyuki Shinohara said Thursday on the sidelines of ministerial talks also in Vietnam, that ASEAN as a group is expected to grow by 5.5 percent this year.

The forecast is better than the global average growth of 4.0 percent and sharply higher than the bloc’s sluggish 1.3 percent expansion last year due to the global downturn.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, a combined market of nearly 600 million people.

Economists have cautioned against hasty and disorderly exits from the stimulus packages.

World Bank chief economist for the East Asia and Pacific region Vikram Nehru said Wednesday the government fiscal stimulus measures should be allowed to run to the end of this year to see how effectively the private sector will take over as the major growth engine.

The leaders also pledged to continue cooperation to restore the “health of financial systems” and to boost monitoring procedures to spot any future problems at an early stage.

Regionally, Australia and India have raised interest rates to check inflation, and ASEAN member Malaysia last month hiked its key rate for the first time in almost four years after the economy emerged from recession.

Other ASEAN central banks, including the group’s biggest member Indonesia, have kept interest rates steady.

While political developments in countries like Thailand could delay rate increases, “the bigger picture remains one where Asian economic growth is surprising on the upside and central banks have to hike rates sooner rather than later,” Singapore’s DBS Bank said.


Source: SGGP

Tourism stimulus programme to be launched

In Vietnam Travel on March 9, 2010 at 8:51 am

Tourism stimulus programme to be launched

QĐND – Monday, March 08, 2010, 10:31 (GMT+7)

A tourism stimulus programme is being developed and will soon be announced. To make the programme effective, the most important factor will be to identify the right stimulus objective.

Domestic or foreign visitors?

Luu Duc Ke, director of Hanoitourist, says that in 2009, a stimulus programme entitled “Vietnam impressions” was targeted towards international visitors. But because of slow implementation and lack of capital, the number of foreign tourists attracted to Vietnam under the programme was disappointing. Only in the domestic market did the number of tours increase by 17 percent.

Tran The Dung, vice director of the Young Generation Company and deputy head of the Ho Chi Minh City Tourism Stimulus Group says that if Vietnam Airlines did not cut air tickets fares for domestic tours, then costs would remain high. In fact, travel agents are responsible for bundling services to create tourism products. Air tickets account for 40-50 percent of domestic tour costs with Vietnam Airlines reducing its fares, the tour would drop by 30-40 percent.

Last year, the number of Vietnamese people visiting foreign countries increased sharply because these countries promoted their tourism in Vietnam. If a tourism stimulus programme was not put in place soon, Vietnam’s tourism sector would find it difficult to compete with other countries, like Thailand, Singapore and Malaysia.

Mr Dung proposes that the Vietnam National Administration of Tourism (VNAT) invite the railway sector to join the stimulus group and reduce its fares for groups of tourists. In the high tourist season, the railway sector often raises fares, so it is not easy to cut the tour costs.

Pham Trung Luong, vice director of the Research and Development Institute says it needs clear stimulus objectives in order to devise proper measures and understand the State’s role in helping businesses cut their prices.

Implementing two big promotion campaigns

The stimulus programmes “Vietnam – your destination” and “Impressive Vietnam Grand Sale” will be held in Hanoi, Ho Chi Minh City and Da Nang in August and September or September and October. Tourists will be refunded the value added tax on their purchases or enjoy discount cards or coupons at supper markets, gift shops, hotels and tourist sites. Prices will drop from 10-50 percent during the two promotional months.

The VNAT and the Trade Promotion Department will build a coordination mechanism among travel agents, airlines and points of sale to implement the programmes.

Another aspect of the programme is that promotional activities will focus on the domestic market and encourage overseas Vietnamese to promote Vietnamese tourism.

Vu The Binh, head of the Travel Department says 80 percent of foreign arrivals to Vietnam get information from people who have previously visited the country. The programme will be developed into a “Smile at tourists” campaign and each locality will develop their own souvenir to present to visitors.

The second promotion campaign will encourage the more than three million overseas Vietnamese to promote Vietnam tourism.

Mr Binh says an initiative to get every Vietnamese foreign resident to encourage 10 tourists to visit Vietnam is not unrealistic.

Nguyen Hoang Hai, Vietnam Airlines Marketing Manager, says that aviation and tourism are inseparable because 70 percent of foreign visitors to Vietnam arrive by air.

Vietnam Airlines’ policy is to improve the quality of services in the peak season and step up the promotion campaign in the off-season.

Mr Hai suggests the tourism sector design some specific programmes right away so the aviation sector can start promoting them overseas.

Source: VOV

Source: QDND

WB oks $500M to support VN stimulus effort, investment reform

In Vietnam Society on December 26, 2009 at 12:23 pm

Vietnam moved a step closer to its goal of reaching middle-income status by 2010, with approval by the World Bank (WB) of the first loan to Vietnam from the International Bank for Reconstruction and Development (IBRD) on December 21. 

The newly approved loan is a US$ 500 million development policy loan that supports a program of public investment reforms in Vietnam.

“World Bank support Vietnam to build on the Government’s determination to strengthen its public investment processes,” said WB Country Director for Vietnam Victoria Kwakwa

The loan, the largest ever made by the WB to Vietnam, is the first of two single-tranche operations that will support the country’s stimulus program in response to the economic crisis.  And by supporting a series of public investment reforms to improve the quality of public investment, the loan should enhance the impact of Vietnam’s stimulus package as well as its subsequent public investments that are important to sustaining Vietnam’s high economic growth.

Over the last two years, Vietnam has experienced a succession of shocks – starting with massive capital inflows in 2007, a surge in commodity prices in 2008, and export declines as a result of the global economic crisis. Stimulus measures adopted in late 2008 and supplemented in early 2009 contributed to strong growth, now projected to be 5.2 percent for 2009.

IBRD is the low-interest lending arm of the WB aimed at reducing poverty in middle-income and creditworthy poorer countries.  Until now, WB support to Vietnam has come from the International Development Association (IDA), which provides credit and grants to the world’s poorest countries.

“The loan is supported by a strong World Bank program that builds on the Government’s determination to strengthen its public investment processes,” said WB Country Director for Vietnam Victoria Kwakwa.

The areas strengthened under the reform program include environmental screening of publicly funded infrastructure projects, environmental management, project preparation and appraisal, procurement, public financial management, the regulatory framework for private participation in infrastructure and monitoring, and evaluation.

The loan approval builds on the recent Country Partnership Strategy Progress Report, which takes stock of progress made in implementing the five-year Country Partnership Strategy that will conclude in June 2011 and introduces some adjustments for the remainder of the period. 

These adjustments include the introduction of IBRD borrowing, at an indicative level up to $1.7 billion during the next year and a half; and support for further strengthening natural disaster response, climate change adaptation and mitigation, a framework for public-private partnerships for infrastructure, higher education reform, and facilitation of technology innovation.

Source: SGGP Bookmark & Share

EU finance chiefs say global stimulus plans must continue

In World on November 30, 2009 at 4:09 am

 European finance chiefs said Sunday the global economic recovery was not yet strong enough for governments to halt stimulus measures, after meeting here with Chinese Premier Wen Jiabao.

A delegation led by Eurogroup chief Jean-Claude Juncker, European Central Bank head Jean-Claude Trichet and economic and monetary affairs commissioner Joaquin Almunia also urged a “gradual and orderly” appreciation of the yuan.

It also warned China to be careful with its exports — often much cheaper than those of other countries — to avoid provoking a protectionist backlash, in the talks held in the eastern city of Nanjing.

“We are considering the moment has not yet arrived to withdraw the stimulus packages that are under way in various parts of world,” Juncker told a news briefing after the meeting between EU officials and Chinese economic managers.

China’s Premier Wen Jiabao (R) and European Commission president Jose Manuel Barroso pose before their meeting on the sidelines of the China-EU summit in Nanjing

The Asian giant’s economic recovery was well under way, Juncker said, adding the Euro area was also detecting clear signs of improvement and expecting to see a moderate recovery in 2010.

“The Euro area will see no major withdrawal of stimulus measures in 2010,” he said.

The meeting took place a day ahead of a major China-EU summit expected to focus on climate change.

The yuan’s exchange rate is one of the thorniest issues between China and the European Union.

The Chinese currency has been effectively pegged to the US dollar since the summer of 2008, and Europe fears the euro’s resultant rise against the yuan will hurt EU exports to China and slow the continent’s economic recovery.

“We said there was a case for what I would say is a gradual and orderly appreciation of the currency against the euro and the major floating currencies. This was our message,” Trichet told reporters.

“We were not defending the overall interest of the European economy only,” he said. “We were defending what we trust is the superior interest of both the Chinese and the European economy — and the global economy.”

Trichet said the rebalancing of China’s export-dependent economy was “part of its own stability and prosperity.”

However, the European officials said they were not optimistic that Beijing’s policy on the yuan would change.

Almunia confirmed the low value of the yuan against the euro had “led to a situation with which we are not satisfied.”

Protectionism was a concern for both sides, he added, pointing out the EU was China’s largest trading partner, accounting for a fifth of the Asian giant’s total exports.

“In this still difficult economic situation we should avoid protectionism… it is in the Chinese interests not to create conditions that can lead to protectionism,” he told reporters after the news conference.

Wen, for his part, also voiced his opposition to trade and investment protectionism, according to comments broadcast on state television. He also defended the yuan.

“China maintains the stability of the yuan exchange rate and has made important contributions to global financial stability and economic development,” he was quoted as saying.

Wen added China would gradually increase the “flexibility of the yuan exchange rate.”

Earlier this month US President Barack Obama appeared to have failed to persuade Chinese officials to loosen the yuan’s peg to the dollar.

“The Chinese are telling us exactly the same thing they are telling President Obama,” European Commission president Jose Manuel Barroso told reporters after a dinner with Wen before Monday’s China-EU summit.

A week before the United Nations Climate Change Conference begins on December 7, environmental concerns are expected to overshadow other issues at the summit, which is also being attended by Swedish Prime Minister Fredrik Reinfeldt, who holds the rotating EU presidency.

“I certainly asked the Chinese and all our partners to explore the outer limits of their position,” Barroso said after the dinner. “What is at stake is very important: it’s the future of our planet.”

China meanwhile is expected to offer reassuring words on the importance of the EU after Obama’s recent visit here fuelled talk of a “G2” world dominated by Washington and Beijing.

One senior European official, who spoke on condition of anonymity, said the Nanjing meeting marked the first “substantial summit we have had since 2007”.

China cancelled a December 2008 summit in protest at a meeting between the exiled Tibetan spiritual leader, the Dalai Lama, and French President Nicolas Sarkozy, who held the EU presidency at the time.

A summit between the two sides was subsequently held in Prague in May this year.

Source: SGGP Bookmark & Share

ADB raises Asian growth forecast after stimulus

In World on September 22, 2009 at 1:06 pm

The Asian Development Bank Tuesday raised its regional growth outlook for this year, with a huge dose of stimulus spending putting Asia on course to lead the world out of its economic slump.

File photo shows a street vendor waiting for customers at a shopping district in Seoul.(AFP Photo)

But the Manila-based bank said that signs of recovery were not strong enough for Asian governments to remove the stimulus prop yet.

In an update to its annual outlook released in March, the ADB raised its 2009 forecast for Asia’s gross domestic product (GDP) to 3.9 percent growth from 3.4 percent.

It also upgraded its 2010 estimate to 6.4 percent from 6.0 percent.

“Despite worsening conditions in the global economic environment, developing Asia is poised to lead the recovery from the worldwide slowdown,” said ADB chief economist Jong-Wha Lee.

“Firm action by many governments and central banks, the relatively healthy state of financial systems prior to the global crisis, and the rapid turnaround in the region’s larger, less export-dependent economies, all enhanced developing Asia’s growth prospects,” the report said.

But the ADB said Asian governments needed to broaden their growth options by developing more intra-regional trade and reducing their risk to external shocks.

Lee added that economic activity in the larger developing Asian economies had rebounded and output looked set for a so-called V-shaped comeback.

However, he cautioned: “The improved regional outlook should not make developing Asian economies complacent.

A protracted global slowdown or the hasty withdrawal of stimulus packages can degrade the region’s ongoing recovery.”

The report looked at prospects for countries stretching from the former Soviet states of Central Asia to some of the tiny Pacific islands, excluding developed countries such as Japan, Australia and New Zealand.

The ADB said it boosted China’s GDP outlook by 1.2 percentage points to 8.2 percent this year thanks to huge pump-priming in the world’s third-biggest economy.

Beijing has targeted growth of eight percent to keep unemployment at bay and avoid social unrest. The ADB has forecast 8.9 percent growth next year, up from 6.5 percent projected in March.

It highlighted a 585-billion-dollar government stimulus late last year, a massive surge in bank lending in the first half of this year and “aggressive monetary easing”.

Export-dependent China announced its huge spending policy last year to boosting domestic consumption and infrastructure projects, as key overseas markets in the United States, Japan and the eurozone went into recession.

The move led to a surge in imports, which in turn helped regional exporters.

India was tipped by the ADB to grow 6.0 percent in 2009, up from a previous forecast of 5.0 percent. Next year the ADB estimates the South Asian giant will expand seven percent, 0.5 percentage points up from the March estimate.

The report said despite weak exports and a poor agricultural outlook, “adroit economic management” by New Delhi had minimized the impact of the global downturn.

The improved economic outlook is reflected in stock markets regionally, which have surged from their troughs recorded in March, just weeks before the last ADB report.

It said a strong financial sector had helped Asia through the downturn, while high savings rates and low levels of household debt meant consumers were also able to absorb some of the shock.

South Korea was still predicted to contract, albeit at a slower pace due to government intervention.

But the heavily export-reliant economies of Hong Kong, Singapore and Taiwan were expected to shrink sharply this year as demand for their goods stays quiet and their markets only slowly regain strength.

The ADB said despite a positive outlook for Indonesia and Vietnam, a deteriorating path ahead for Malaysia and Thailand had forced it to cut Southeast Asia’s outlook to 0.1 percent growth, from 0.7 percent in March.

Central Asia, which is grappling with a banking crisis and a fall in the price of its key export oil, is seen growing by just 0.5 percent now, compared with a previous forecast of 3.9 percent.

Source: SGGP

Malaysia announces stimulus package to boost economy

In Uncategorized on November 6, 2008 at 12:50 pm

Kuala Lumpur (VNA) – Malaysian government has announced a 7 billion ringgit (about 2 billion USD) stimulus package to reinforce the economy, maintain the country’s economic growth and minimise impacts from the global economic crisis.

The money saved from the fuel subsidy will be channeled to enable more people to own houses, Deputy Prime Minister Najib Tun Razak said when winding up the debate on the 2009 Budget at the parliament.

Of the money, 1.2 billion ringgit has been allocated to build 25,000 units of low-and medium-cost houses; 500 million ringgit to upgrade, repair and maintain police stations, living quarters, army camps and quarters; and 600 million ringgit to minor projects under the public and basic infrastructure project maintenance programme.

Besides, 500 million ringgit has been apportioned to repair and maintain public amenities such as roads, schools and hospitals and another 500 million ringgit to build and upgrade roads in rural areas, villages and agriculture roads, according to the Deputy PM.

Measures pronounced in the package was proof of the government’ s serious concern for the people’s well-being and to stimulate private sector confidence, said Deputy PM Najib Tun Razak, who is also Finance Minister.
The Gross Domestic Product (GDP) would be revised downwards to 3.5 percent for 2009 from 5 percent this year, Najib said.-