CARI Captures Issue 619: Six state elections in Malaysia end up with status quo results

Six state elections held in Malaysia end with status quo results
(13 August 2023) On 12 August, 2023, six states in Malaysia held state elections, seen by pundits as indicative of the level of support for the ruling unity government of political coalitions Pakatan Harapan (PH) and Barisan Nasional (BN). State elections were held in the states of Kedah, Penang, Kelantan, Terengganu, Selangor and Negeri Sembilan, and saw the PH-BN unity government compete with the opposition coalition Perikatan Nasional (PN). The state elections ended with a status quo result, with PH-BN holding onto Selangor, Negeri Sembilan, and Penang, while PN held onto their states of Kedah, Kelantan, and Terengganu. That being said, PN was able to make inroads into certain seats in PH-BN-held states. PN was able to deny PH-BN a two-thirds majority in the economically key state of Selangor.

Tropical resorts attract foreign tourists seeking to escape heat waves at home
(13 August 2023) Tropical resorts in Thailand are attracting foreign tourists seeking to escape heat waves at home. In parts of the world impacted by heat waves, such as parts of the United States and southern Europe, authorities have urged residents to refrain from going out, making it difficult for tourists to visit the regions. A byproduct of the heat waves, fueled by climate change, may ultimately prove welcome for Thailand’s COVID-19-hit tourism sector. The summer vacation season in Europe, the U.S., and Japan runs from June to October, corresponding to Thailand’s rainy season, which foreign tourists typically like to avoid. But should Thailand still be able to attract foreign visitors even during its rainy season, the still-recovering tourist industry stands to benefit.

Domestic milled rice prices jump nearly 20% last week after rice export ban by India
(17 August 2023) A recent rice export ban by India on 20 July, 2023, has triggered chaos in Thailand’s rice trading, with domestic milled rice prices jumping nearly 20% last week to US$597 per ton, up from around US$479 over the previous few weeks. This has pushed up the Thai export price for benchmark white rice by 5% to US$610 per ton, reflecting the rise in global prices, which have surged to an 11-year high. Although Thai authorities have not limited rice exports, exporters are still reluctant to sell due to uncertainty over supplies. Cases of hoarding are expected to push Thai rice prices to uncompetitive levels. In addition, the El Nino dry weather pattern is expected to limit Thailand’s rice harvest and prevent the country from exporting more rice in 2023 and 2024.

The Philippines negotiating with Viet Nam and India to import rice to lower prices
(12 August 2023) The Philippines is currently negotiating with India and Viet Nam to import rice in order to boost its buffers and lower prices. According to Filipino officials, Vietnamese exporters have already quoted prices that are as much as US$40 lower than at a recent meeting. It is hoped that this will pave the way for the Philippines to get better terms for an additional 300,000 metric tons to 500,000 metric tons of rice importation for 2023. The additional rice purchases may lower prices for Filipinos as it will boost national inventory, which even without imports is expected to last for 52 to 57 days by the end of 2023. In December 2022, Filipino agriculture officials stated that rice imports in 2023 will reach around 2.5 million metric tons, from about 3.5 million metric tons in 2022.

Central bank keeps policy rate steady at 6.25% for third straight meeting
(17 August 2023) The Philippines’ central bank, the Bangko Sentral ng Pilipinas (BSP), kept its benchmark interest rate unchanged at 6.25% for a third straight meeting on Thursday. BSP stated it needed to balance the need to support economic growth while keeping inflation in check. The BSP’s decision to extend its policy pause followed data released last week showing the domestic economy growing at its slowest annual pace in nearly 12 years in the second quarter of 2023. This was attributed to a decline in government spending and weaker domestic demand. While prices cooled for a sixth straight month in July 2023, the 4.7% inflation rate remained outside the official target of 2% to 4% inflation.

Indonesia to launch Southeast Asia’s first high-speed rail in October 2023
(16 August 2023) Indonesia is set to launch Southeast Asia’s first high-speed rail in October 2023. The 140-kilometer track that connects Jakarta and Bandung will have a top operating speed of roughly 350 kilometers per hour, and the entire line can be traversed in as little as 36 minutes. The Indonesian government had set October as the new opening date for commercial operations after pushing back the previous timeline of August. A trial launch is planned for September and October. The high-speed rail is part of China’s landmark Belt and Road Initiative project. The project was initially set to open by 2018, after having broken ground in 2016. Contributing to the delays were difficulties in acquiring land.

Sea Ltd. to ramp up investments into e-commerce unit Shopee amidst increasing competition from new rivals like Tiktok
(16 August 2023) Singapore-based tech giant Sea Ltd. plans to ramp up investments into its e-commerce unit Shopee amidst increasing regional competition from new rivals like TikTok. Chinese short video platform Tiktok launched online shopping service TikTok Shop in 2021. Sea did not disclose any figures regarding the investments, although it acknowledged that said investments will impact its bottom line and may result in losses for Shopee and Sea Group as a whole in certain periods. Sea posted a net income of US$330 million for the April-June period of 2023, a turnaround from a US$931 million loss in the same period in 2022. This was the company’s third consecutive quarterly profit.

RCEP Monitor

Japan’s exports fall 0.3% year-on-year in July, the first time in more than two years
(17 August 2023) The value of Japan’s exports fell by 0.3% year-on-year in July 2023. This is the first contraction since February 2021, and was attributed to falls in shipments of chip-making gear and parts, which outweighed a jump in demand for cars. Likewise, imports fell for a fourth month, contracting 13.5% year-on-year. Japan’s trade balance slipped back into a deficit of US$537.52 million after a US$293.70 million surplus in June. Other data released earlier showed that Japan’s economy grew at a 6% annualised pace in the second quarter, with much of that expansion powered by external demand. The Bank of Japan noted in its latest outlook report that external demand may flag in the months ahead, due to a slowdown in the pace of recovery of overseas export markets.

Net employment falls 14,600 in July 2023 to end two months of very strong growth
(17 August 2023) According to figures by the Australian Bureau of Statistics, net employment unexpectedly fell by 14,600 in July 2023 to end two months of very strong growth. This reversed some of June’s 31,600 jump and confounding market forecasts of a 15,000 rise. Concurrently, the jobless rate also rose to 3.7% from 3.5%. These latest figures from the labor market bolstered sentiments that the Reserve Bank of Australia (RBA) might be done with hiking interest rates, having paused rate hikes for two months already. Australia’s labor market has proved remarkably resilient with 399,000 net jobs added in the 12 months to July even as interest rates climbed 400 basis points to a decade-high of 4.1%.

Central bank holds rates steady for second straight meeting, but signals future hikes
(16 August 2023) New Zealand’s central bank, the Reserve Bank of New Zealand (RBNZ), kept interest rates unchanged for a second straight meeting on 16 August, 2023, holding the Official Cash Rate (OCR) at 5.5%. However, new forecasts by RBNZ show a slightly higher track for the OCR, implying a small chance of an increase in the future, while rate cuts have been pushed from 2024 into 2025. As part of the RBNZ’s updated forecasts, the average OCR is expected to rise to a peak of 5.59% in mid-2024 before falling back to 5.5% by the end of that year and further in 2025. Its previous forecasts suggested rate cuts could start as early as the third quarter of 2024. Inflation currently stands at 6%, and is projected to fall below 3% by the third quarter of 2024.

Leave a Reply

Your email address will not be published. Required fields are marked *