Japan's Economy Hammered Again

A plunge in demand for Japanese exports has the world's second largest economy sinking at a record pace, with the prime minister warning the situation could become even "more severe."

Japan said Wednesday its economy shrank at a 15 percent annual pace during the first three months of 2009.

It is the worst decline since Japan began keeping records in 1955 and much bigger than the declines seen so far in the United States or Europe.

Officials say a big reason for the fall is a drastic drop in demand for Japanese products around the world. Overseas shipments for the first three months of 2009 fell 26 percent from the previous quarter.

Japanese Prime Minister Taro Aso says the economic struggles could get worse, because Japanese consumers are only now starting to feel the impact of the recession.

Japanese consumer spending fell more than one percent during the first three months of the year compared to the last three months of 2008.

Still, some economists say the new data might indicate that Japan has already seen the worst of the recession.

They say the global drop in demand for exports is slowing and that moves by Japanese companies to survive the downturn should also help.

Japan is not the only Asian country to suffer because of falling demand for goods around the world.

Thailand said Tuesday that exports declined for a sixth consecutive month in April, dropping more than 26 percent compared to the year before.

Meanwhile, an official with the World Bank warns it is too soon to tell if China is starting to recover from the global recession.

World Bank China director David Dollar says government spending has helped the world's third largest economy but that more private investment is needed to sustain economic growth.

China said Wednesday it will send three delegations to Taiwan to buy food and machinery, part of what Chinese officials say is a joint effort to tackle the financial crisis.

Also Wednesday, the Asian Development Bank signed agreements with eight Vietnamese banks in an effort to help that country's exporters.

Some information for this report was provided by AFP, AP and Reuters.

Source : By VOA News
20 May 2009

IMF: Asia Facing Slow Economic Recovery, Urges Sustained Measures

The International Monetary Fund says many Asian economies are to continue to tumble this year and will take some time to recover from the global economic slow-down. The IMF says Asian governments should sustain economic stimulus policies and encourage more domestic consumption.

The new IMF report on the economic outlook for the Asia and the Pacific says the region will take longer than other parts of the world to recover from the global slow-down.

The Washington-based organization says Japan is expected this year to experience its worst recession on record.

The economies of Korea, Hong Kong, Taiwan, New Zealand and Australia are also expected to shrink.

In Southeast Asia, the International Monetary Fund says Singapore, Malaysia and Thailand will contract while the Philippines will record zero growth.

"Accordingly, we forecast that Asia's growth will decelerate to just 1.3 percent this year before rebounding to 4.2 percent in 2010, still well below the region's potential and the 5.1 percent rate recorded in 2008," said Kalpana Kochhar, deputy director of the IMF's Asia and Pacific Department.

On the positive side, China, India, Indonesia and Vietnam are expected to slow down this year, but still grow their economies.

The IMF says most Asian economies, with the exceptions of Singapore and Taiwan, are expected to grow next year as exports begin to revive.

But, Kochhar says that also depends on Asian governments continuing to stimulate their economies.

"Fiscal stimulus provided in 2009 will need to be sustained into next year. And, in many cases there is also scope for reducing interest rates further or even adopting unconventional monetary policies as in the advanced countries," said Kochhar.

Kochhar adds that Asian countries also need to maintain their foreign exchange liquidity through currency swaps or assistance from organizations like the International Monetary Fund.

Most Asian economies worst hit by the global slow-down rely on manufacturing for export as a major growth engine.

But the lack of credit in developed countries has led to what the IMF calls a "collapse in the demand" for Asian exports.

The IMF says between September 2008 and February this year, merchandise exports in emerging Asian economies fell at an annualized rate of about 70 percent - almost three times the drop experienced during the late 1990s Asian financial crisis.

In the long run, the International Monetary Fund says, Asian economies will need to change their structure to rely less on exports, since consumption in advanced countries may remain weak for years to come.

By Daniel Schearf
Bangkok
06 May 2009
VOA News

Pertumbuhan Investasi Bisa Positif di Triwulan II-2009

Pertumbuhan investasi Indonesia akan positif pada mulai triwulan II-2009 sampai akhir tahun. Menteri Keuangan sekaligus Menko Perekonomian Sri Mulyani optimistis terhadap peluang itu karena membaiknya prospek perekonomian Indonesia.

"Sekarang situasi sudah membaik, dari April dan berlanjut sampai dengan Mei. Kita berharap penurunan suku bunga dan stabilitas yang terjaga, prospek ekonomi lebih baik dari yang diperkirakan. Itu akan membuat perubahan dari perusahaan-perusahaan dalam melakukan ekspansinya tahun 2009 ini," tuturnya saat ditemui di kantornya, Jalan Wahidin Raya, Jakarta, Senin malam (18/5/2009).

Optimisme ini menurut Sri Mulyani beralasan, sebab pada pada Januari sampai Mei 2009, Indonesia bisa menarik investasi langsung masuk senilai US$ 2 miliar, di tengah situasi mengeringnya arus modal ke negara berkembang akibat krisis.

"Sampai dengan Mei neraca pembayaran, capital flow yang masuk ke Indonesia lebih dari US$ 2 miliar dan current account kita yang positif, membuat cadangan devisa kita meningkat cukup signifikan dalam 3 bulan pertama ini," katanya.

Selain itu, di sektor keuangan, dikatakan Sri Mulyani, partisipasi investor asing di instrumen saham dan juga SUN (Surat Utang Negara) terus meningkat.

"Kita lihat kalau Indonesia dianggap terus stabil, dan pertumbuhan kita tertinggi ketiga di dunia, di region ini, maka Indonesia sudah meletakkan dirinya memiliki attractive yang luar biasa," ujarnya.

Sumber: www.detikfinance.com 19/05/2009

Asian Development Bank Wants Balanced Growth

The Asian Development Bank says Asia needs to balance its growth to prevent damage from future crises like the global economic slow-down. The bank has pledged to increase funds to strengthen growth.

The Asian Development Bank is holding its annual meeting in Bali, Indonesia, this week with the global economic crisis's effect on Asia at the top of the agenda.

ADB President Haruhiko Kuroda told the opening session Asia needs to restructure its growth model.

The bank says Asian economies are too dependent on foreign demand and need to move away from their reliance on exports.

"Rebalancing helps us to endure the current crisis," said Jong-Wha Lee, the Manila-based lender's acting chief economist. "And, more importantly, help protect us from the future external shocks."

Lee says Asian governments need to spend more on social services to encourage more domestic spending.

He says although the global financial crisis started in the United States it is rooted in global imbalances.

"Asia's excess savings and current account surpluses allowed the United States to maintain excessive household consumption and huge current account deficit," Lee said. "Asia should use its own savings more efficiently and more productively."

The Asian Development Bank says Asia 's growth this year is expected to fall to 3.4 percent.

The bank predicts 60 million Asians will remain trapped in poverty and that number will rise to 160 million in 2010.

Bank president Kuroda says with strong national and regional efforts, and a mild global recovery expected, the region should bounce back to six percent growth in 2010.

The Asia Development Bank says it plans to increase its capital base by 200 percent to $165 billion. The lender has also increased assistance for this year and next by $10 billion.

The extra funds are to help with the speed and efficiency of the bank's poverty alleviation efforts.

By Daniel Schearf
Bangkok
04 May 2009
VOA News