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Asia-Pacific expected to contribute 70% to global growth in 2023: IMF

​ The International Monetary Fund (IMF) predicted a downturn in global growth to 2.8 per cent in 2023 from 3.4 per cent in 2022, with over 70 per cent expected to come from the Asia-Pacific region. High-frequency indicators show manufacturing weakness contrasting with resilient services across G20 countries and robust labour markets in advanced economies. Meanwhile, financial instabilities revealed by strict monetary policy need careful handling.

Though global headline inflation appears to have peaked and core inflation has somewhat eased, particularly in India, it remains significantly above central banks’ targets in many G20 countries. Policymakers have been warned against premature celebrations, as easing policy too soon could undo progress on inflation, according to an IMF blog titled ‘Weak Global Economy, High Inflation, and Rising Fragmentation Demand Strong G20 Action’ by Kristalina Georgieva.

Against this backdrop, a persistent monetary policy approach is needed until inflation is reliably reduced to target. Fiscal policy also has a role to play in supporting disinflation, rebuilding buffers, and enhancing debt sustainability. Meanwhile, consolidation efforts should protect growth-boosting investments wherever possible.

However, the medium-term economic outlook is not promising, with IMF projections for global growth over this period hovering around 3 per cent, considerably below the 2000-2019 historical average of 3.8 per cent. Economic fragmentation risks undermining growth and addressing global challenges, such as rising sovereign debt crises and the existential threat of climate change.

Significant progress has been made, as evidenced by the breakthrough on Zambia’s debt restructuring, a testament to international collaboration. The G20 also recently announced reaching its $100 billion target in special drawing rights (SDRs) pledges, which will be directed from wealthier to poorer nations, demonstrating international solidarity.

Despite these achievements, more support is required to confront the challenges. Climate change, high living costs, and high interest rates are causing disproportionate hardships, pushing more countries towards debt distress and threatening developmental prospects. Therefore, strong multilateral institutions, like the World Bank and the IMF, are crucial in providing this support.

As we face a fresh set of transitions, the IMF pledges to continue to adapt and respond with agility through timely policy changes and stronger resources. Prioritising a quick and successful completion of the 16th quota review and replenishing the IMF’s concessional resources for vulnerable nations are fundamental steps towards ensuring a robust global finance safety net, added the blog.

Strong leadership from the G20 is required to guarantee an international financial architecture that is fit for purpose. A global response of a scale commensurate with the world’s challenges is paramount to ensure all nations are placed back on a sustainable path to growth and prosperity.

Fibre2Fashion News Desk (NB)


The International Monetary Fund anticipates a decrease in worldwide economic expansion to reach 2.8 percent by 2023, largely thanks to outcomes in the Asia-Pacific region. G20 countries are displaying a strong service sector and labor markets despite adversity in the manufacturing sector. Given the current economic ambiguities, working together globally is essential, such as Zambia’s accomplishment in dealing with their debt and the G20 alliance agreeing to donate $100 bn in Special Drawing Rights.


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India-China trade falls 0.9% in H1 2023; 1st signs of slowdown in year

​ Bilateral trade between China and India showed the first signs of slowing down in years, falling by 0.9 per cent in the first half (H1) this year.

China’s exports to India in H1 2023 were worth $56.53 billion compared to $57.51 billion during the same period last year–a decline of 0.9 per cent, according to Chinese customs data.

India’s exports to China during the same period totalled $9.49 billion compared to $9.57 billion during the same period last year.

India-China trade touched an all-time high of $135.98 billion last year, overtaking the $125 billion mark a year earlier by registering an 8.4 per cent rise.

The Asian giant’s trade deficit in H1 2023 declined significantly to $47.04 compared to $67.08 billion during H1 last year. The trade deficit reached $101.02 billion in 2022, up by 45 per cent from $69.38 billion in 2021.

China’s total trade in H1 this year fell by nearly 5 per cent from a year earlier in dollar terms. While exports slipped 3.2 per cent, imports declined by 6.7 per cent.

Its exports fell by 12.4 per cent year on year in June this year amid weakening demand following rising interest rates by central banks to curb inflation, a news agency reported.

Fibre2Fashion News Desk (DS)


The trade between China and India displayed the first indications of a sluggish progression in recent years, diminishing by 0.9% in the first six months of this year. China’s exports to India decreased from $57.51 billion in the first half of 2022 to $56.53 billion in the same period of 2023. Meanwhile, India’s exports to China decreased from $9.57 billion to $9.49 billion.


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Euro area & EU’s industrial production sees modest rise in May 2023

​ Euro area and European Union’s (EU) industrial production saw a modest increase in May 2023, according to Eurostat, the statistical office of the EU. Euro area saw a seasonally adjusted rise of 0.2 per cent, while the EU observed a 0.1 per cent increase compared with April 2023. The previous month saw more significant growth, with industrial production increasing by 1 per cent in the euro area and 0.6 per cent in the EU.

However, when compared to the previous year, industrial production declined in May 2023, dropping by 2.2 per cent in the euro area and 1.8 per cent in the EU.

Breaking down these figures by category, the euro area experienced a growth in the production of intermediate and durable consumer goods by 0.5 per cent, and non-durable consumer goods by 0.3 per cent. However, there was a 1.1 per cent decrease in energy production. Similar trends were observed in the EU, with energy production seeing the largest decline at 1.8 per cent, as per Eurostat.

Among the member states, Slovenia recorded the highest monthly increase in industrial production at 7.9 per cent, followed by Croatia at 4.3 per cent, and Slovakia and Finland, both at 2.5 per cent. Conversely, Ireland saw the most significant decrease at 4.9 per cent, with Lithuania declining by 2.8 per cent, and Romania and Belgium both recording a 1.2 per cent drop.

On a year-on-year basis, energy production in the euro area and the EU fell by 6.2 per cent and 7.5 per cent respectively. Durable consumer goods saw a decrease in production as well, with the euro area and EU recording drops of 5.0 per cent and 6.4 per cent respectively.

Finally, among member states, Ireland registered the largest annual decrease in industrial production at 16.2 per cent, followed by Estonia at 12.8 per cent and Bulgaria at 11 per cent. In contrast, Malta, Denmark, and France witnessed the highest increases at 12.2 per cent, 7.8 per cent, and 2.9 per cent respectively.

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Eurostat reported that in May 2023, industrial production shifted up slightly in the euro region and the entire EU, in comparison to the reached result in April. Year over year, industrial output decreased by 2.2% in the euro zone and by 1.8% in the European Union. The largest reduction was seen in energy production. Slovenia, Croatia, and Malta saw the greatest expansion among the participating countries.


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UK announces up to ?25 mn in funding to back economic growth in ASEAN

​ UK foreign secretary James Spencer Cleverly recently announced up to ?25 million in funding to support economic growth of members of the Association of Southeast Asian Nations (ASEAN) and reduce their poverty, by bringing UK expertise in trade, regulation and financial services to the region over the next five years.

He was visiting Jakarta to meet ASEAN partners to advance cooperation on the shared priorities of security, stability and prosperity.

Total UK-ASEAN trade in goods and services was worth ?46.5 billion at the end of 2022.

Later this month, the United Kingdom will begin its formal accession to the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP), further strengthening British trade and investment links in the region, an official release said.

“The UK and ASEAN are working together to deliver the Plan of Action 2022 to 2026 to improve lives across the region, such as ensuring girls across southeast Asia can access quality education. This is in addition to UK work in the wider Indo-Pacific, such as the Climate Action for a Resilient Asia programme, which is upgrading homes and infrastructure to withstand the impacts of climate change,” Cleverly said ahead of the visit.

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80 million in aid money for the Rohingya people in Bangladesh

UK foreign secretary James Spencer Cleverly declared that around ?80 million will be contributed to the Rohingya people in Bangladesh as aid. A sum of 25 million dollars will be invested over the next five years to facilitate the development of ASEAN countries through trade, regulation and financial assistance, resulting in economic growth and the alleviation of poverty. The UK will initiate its membership of the CPTPP at the end of this month, further developing its connections with the area.


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Swiss firm EMS’ net sales at CHF 1,183 mn in H1 FY23

​ Swiss-based EMS Group, a leading firm in high performance polymers and specialty chemicals, has reported net sales of Swiss franc (CHF) 1,183 million in the first half (H1) of fiscal 2023 (FY23), 7.9 per cent down from CHF 1,284 million the previous year. This represented a 1.9 per cent decrease in local currency terms.

The net operating income (EBIT) in H1 FY23 was CHF 280 million, compared to CHF 324 million during the same period the previous year, the company said in a press release.

Despite these setbacks, due to its robust positioning in the specialty segment and decisive actions, EMS succeeded in maintaining an EBITDA margin of 25.9 per cent, though lower than the previous year’s 27.5 per cent.

The company’s H1 FY23 EBIT margin reached 23.7 per cent, compared to 25.2 per cent the previous year. The operating cash flow (EBITDA) came to CHF 306 million, a drop from the previous year’s figure of CHF 354 million.

EMS forecasts net sales and net operating income (EBIT) for the entirety of 2023 to fall below the previous year’s levels.

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For the first six months of FY23, EMS Group saw a decrease in net sales and operating income, indicating figures of CHF 1,183 million and CHF 280 million, respectively. Despite sales dropping and forex issues, the EBITDA margin was a notable 25.9%. The company anticipates that their sales and earnings before interest and taxes for the financial year of 2023 will be lower than they were in 2022.


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US partnering with ASEAN to speed up clean energy transition: Blinken

​ The United States is partnering with the Association of Southeast Asian Nations (ASEAN) to address the climate crisis and to accelerate clean energy transition, US secretary of state Secretary Antony J. Blinken said in Jakarta recently.

That includes working to launch the US-ASEAN Climate Solutions Hub, which will help ASEAN countries build greater resilience and meet their ambitious emissions reduction targets, and the collaboration on renewable battery storage and electricity transmission.

He visited Indonesia to participate in the US-ASEAN Foreign Ministers’ Meeting, the 13th East Asia Summit Foreign Ministers’ Meeting, and the 30th ASEAN Regional Forum.

The United States is ASEAN’s largest source of foreign direct investment, and over 6,200 American companies operate within ASEAN countries.

US trade with ASEAN totaled more than half a trillion dollars last year, and supported more than 625,000 jobs in the United States.

“To make that trade faster, cheaper, more dependable, we have invested significantly in the ASEAN Single Window. That’s an automated system for clearing customs across the region,” Blinken said addressing a press conference.

This year, the United States is celebrating 46 years of US-ASEAN partner relations.

From 2002 to 2021, the United States provided over $12.1 billion in economic, health and security assistance to Southeast Asian allies and partners, including the 10 ASEAN member states.

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Recently in Jakarta, Secretary of State Antony J. Blinken announced a collaboration between the US and ASEAN bloc to battle the climate emergency and to speed up the clean fuel transition. This involves initiating the US-ASEAN Climate Solutions Organization and collaborating on renewable energy storage and electricity transmission.


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