CARI Captures Issue 581: Anwar Ibrahim sworn in as Malaysia’s tenth prime minister following 15th general election
Anwar Ibrahim sworn in as Malaysia’s tenth prime minister following 15th general election
(24 November 2022) On 24 November, 2022, opposition leader Anwar Ibrahim was sworn in as Malaysia’s tenth Prime Minister, following the country’s fifteenth general election on 19 November.The election had led to Malaysia’s first hung parliament, after which followed days of behind-the-scenes negotiations between the various parties. The breakthrough came when the Barisan Nasional (National Front) coalition, which emerged with 30 seats, agreed to back a unity government under Anwar. Anwar’s Hope Pact secured 82 seats of its own, short of the 112 needed for a simple majority. The rival National Alliance under former Prime Minister Muhyiddin Yassin secured 73 seats in the election, and had at one point received the support of Borneo-based parties which had won a combined 28 seats.
The Philippines central bank ready to move at slower pace of rate increases
(22 November 2022) The Philippines’ central bank, the Bangko Sentral ng Pilipinas (BSP), is ready to move at a slower pace of rate increases amidst expectations of the US Federal Reserve turning less hawkish in the near future. Governor Felipe Medalla expects the Fed’s next rate move to be a half-point increase followed by a quarter-point. The BSP has delivered the most aggressive tightening in Southeast Asia in 2022, with 300 basis points of moves since May 2022 to contain inflation and support the peso. By the second half of 2023, the BSP expects inflation to slow to the midpoint of their 2% to 4% target range. The Philippines’ peso has remained Southeast Asia’s worst performing currency. The BSP is unlikely to change limits on bank’s foreign exchange position.
Thailand’s economy expands by 4.5% year-on-year in the third quarter of 2022
(21 November 2022) Thailand’s economy expanded by 4.5% year-on-year in the third quarter of 2022, buoyed by a reinvigorated tourism sector. Thailand’s economy had expanded by 2.5% during the previous three months. On a seasonally adjusted quarter-on-quarter basis, the economy grew at an annualized 1.2% from the second quarter which ended in June 2022. Officials predict full-year growth to reach 3.2%, an increase from the 2.7% to 3.2% prediction announced in August 2022. For 2023, 3% to 4% growth is now being forecast. According to the Tourism Authority of Thailand, the country is expected to welcome up to 10 million foreign tourists in 2022, as well as 18 million in 2023. However, headline inflation remains a problem, hitting a 14-year-high of 7.86% in August 2022, followed by 6.41% in September and 5.98% in October.
Cambodian government advisor claims China’s BRI has contributed enormously to Cambodia’s economic growth
(23 November 2022) Senior advisor to the Cambodian government Sok Siphana has claimed that China’s Belt and Road Initiative (BRI) has contributed enormously to Cambodia’s economic growth. Siphana stated that the BRI has helped develop a lot of Cambodia’s infrastructure, including the Phnom Penh-Sihanoukville Expressway, the Sihanoukville Coal Power Plant and the Siem Reap Angkor International Airport. He pointed to the Sihanoukville Special Economic Zone, which he claimed would help accelerate Cambodia’s development of a modern industrial mix. He also claimed that the Regional Comprehensive Economic Partnership (RCEP) trade pact and the Cambodia-China Free Trade Agreement (CCFTA), which both entered into force earlier in 2022, will help promote additional trade of Cambodia’s agricultural products and commodities.
Singapore predicts GDP growth in 2023 to come in as low as 0.5% due to export slump
(23 November 2022) Singapore predicted its GDP growth for 2023 to come in as low as 0.5%, as an export slump underscores a worsening global economic outlook. Trade officials believe the growth range for 2023 could start from the floor of 0.5% to a ceiling of 2.5%, weaker than the 3.5%” expansion forecast for 2022. For the July-September quarter, the preliminary figure of 4.4% year-on-year growth was downgraded to 4.1%. Earlier in November 2022, Singapore reported that non-oil exports shrank 5.6% on the year in October 2022, pulling back from September’s 3.1% rise. For the rest of 2023, the weaker external outlook will weigh on the growth of Singapore’s outward-oriented sectors. The decline in October in non-oil exports broke an almost two-year streak of consistent expansion for Singapore’s exports.
Viet Nam will promote the usage of e-commerce channels to expand export markets
(22 November 2022) Viet Nam will promote the usage of e-commerce channels to expand export markets and enable enterprises to participate in foreign distribution channels. It is believed that e-commerce channels will play an important part in helping Viet Nam’s enterprises to develop a strategic relationship with foreign distribution networks, part of Hanoi’s plan to build a stable and sustainable export distribution model. Authorities plan to provide support in market information to around 20,000 enterprises and training and consultancy to another 15,000, in order to help them improve competitiveness and participate more in the global value chains. In addition, 5,000 enterprises will be provided with support to build the capacity for joining cross-border e-commerce. Viet Nam hopes to develop import and export markets to ensure sustainable growth in the long term and encourage Vietnamese firms to participate more in global production networks.
Indonesia to use excess budget cash to reduce borrowing in 2023
(24 November 2022) Indonesia will accumulate excess cash in its 2022 budget, which it intends to use to reduce borrowing in 2023, when it is expected to face market volatility and a weakening global economy. Indonesia has overseen a strong fiscal position in 2022, with tax revenues gaining a boost from exports (driven by high commodity prices) as well as the post-pandemic recovery in economic activity. As of end-October 2022, the government had collected excess cash of US$17.26 billion, although its overall budget was in a deficit representing 0.91% of GDP. In 2023, the government is targeting a budget deficit of 2.8% of GDP assuming economic growth of 5.3%, compared with the actual forecast range of 5% to 5.3% for 2022. However, Indonesia’s central bank stated this week that growth in 2023 may slow to 4.37%.
Government notes moderate recovery for economy, remains cautious over risks from global economic slowdown
(24 November 2022) In its monthly report for November 2022, Japan’s government noted a moderate recovery for the economy, while remaining cautious over risks from a global economic slowdown as well as financial market fluctuations. This comes as data last week showed that the economy had shrank for the first time in a year in the third quarter, due to sluggish global growth and import costs hurting consumption and business activity. Other data had shown manufacturing activity in Japan contracting at the fastest pace in two years in November due to inflationary pressures. Japan’s government also stated that private consumption and capital spending were also recovering, while exports and imports were ‘almost flat’. In October 2022, the government compiled a stimulus package to alleviate the impact of accelerating inflation.
South Korea’s central bank raises its benchmark interest rate by 0.25%
(24 November 2022) South Korea’s central bank, the Bank of Korea, raised its benchmark interest rate by 0.25% to 3.25% in order to battle high inflation amid a global economic slowdown. The Bank of Korea has lifted rates six times since August 2021 in its efforts to boost the recovery from the COVID-19 pandemic, as well as to tame inflation. Consumer prices surged 5.7% year-on-year in October 2022 due to price hikes in electricity, gas and processed food products, although the increases in the prices of petroleum products has moderated. With inflation expected to remain high, the bank sees continued rate hikes as warranted ‘for some time’. The official outlook for economic growth in 2023 has been lowered to 1.7% from the previous estimate of 2.1% made in August 2022.
Australia to become more selective about who it will let invest in its critical minerals industry
(25 November 2022) Top lithium supplier Australia is set to become more selective about who it will allow to invest in its growing critical minerals industry. Australia is a major supplier of minerals key to the green energy industry like rare earths, and has stated that it has ‘more to gain’ by encouraging investments from allied countries in order to build up its minerals processing industry. The Australian government stopped short of announcing any review of existing international holdings of operations. Australia is revising its critical minerals strategy and hopes to position itself as a green superpower, backed by its rich mineral endowments. It recently signed a Critical Minerals Partnership with Japan in October 2022, while its Southeast Asia Economic Strategy to 2040 will include a focus on resources, energy and the green economy.