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Budget Primer: A Broader Lesson from Singapore’s Reporting

Singapore has regularly reported considerable surpluses in its annual fiscal budget. Budget surpluses have been an essential part of the country’s growth strategy (Asher et al. 2015) as they are perceived to provide a signal of sound public sector financial management to foreign investors, key stakeholders in Singapore’s development planning. Budget surpluses also enable the corporate income tax rate to be kept among the lowest in the world, at 17%.

Is China’s Xi on the Correct Economic Path?

President Xi Jinping’s economic thinking – “Xiconomics” – reflects the kind of adjustment that is required by Chinese rebalancing in a challenging international environment.

Three years ago, sinologists in the West – led by Barclays Capital – introduced the term “Likonomics” to describe the central tenets of Premier Li Keqiang: no stimulus, deleveraging, and structural reforms. By now, those policies were expected to push China toward a “temporary hard-landing” with quarterly growth plunging to 3%.

Singapore’s Economy Contracted in 2015 but Remains in Good Standing

According to government figures, Singapore’s economy grew 2.0% in 2015, a shortfall from 3.3% seen from 2014, according to CNBC. Retail trade and wholesale added the most growth, but failed to offset the city-state’s fall in manufacturing output. Analysts expect the economy to expand anywhere from 1.0% to 3.0% in 2016.

IMF Chief Suggests Fiscal Reforms May Pave Road to Middle East Peace

Christine Lagarde, the outspoken and highly popular head of the International Monetary Fund (IMF), has made a rather bold statement about how to achieve peace in a region known for its many years of turmoil. She has called upon the nations of the Middle East to improve their taxation systems and enact significant fiscal reforms as a way to create political stability and, ultimately, peace.

Lagarde outlined her philosophical pathway to peace in the second speech she has delivered this week in the Middle East.

Fed Signals Fear as Consumer Confidence, Manufacturing Falls

A Federal Reserve chairman has warned that the central bank’s policies may be hurting growth as several economic indicators soured.

In an interview with the Financial Times, Dallas Federal Reserve head Robert Kaplan warned of the “downside” to a more tightening monetary policy. Additionally, he noted that the Fed’s previous optimism was possibly too early as inflation and other economic data points became increasingly sluggish in early 2016.

Can Asian Regional Order Lead to Solid Economic Growth?

The regional order in East Asia is in flux. The relative decline of US power in Asia has led to new challenges. The principles, rules, norms and methods for managing the international agenda are being questioned. The willingness of the United States to maintain an active role in East Asia, alongside the behaviour of China and key groupings such as ASEAN will define the future of the region. How these key actors respond to the changing security environment will be crucial in determining the future of the security order in East Asia.

So, what does this mean for Japan?

Mixed Signals Indicate an Uneven Economic Recovery in the U.S.

The Chicago Federal Reserve announced Monday that the country is seeing improved economic conditions, which helped bolster a recovering stock market that remains down for the year. “The Chicago Fed National Activity Index (CFNAI) was +0.28 in January, up from −0.34 in December,” the Federal Reserve announced, indicating that economic growth has improved somewhat in the country, although the reading was still a disappointment to some analysts.

China’s Rise to Challenge the U.S.

China’s rise as a quasi-superpower represents the most important change in the international system in the 21st century. China is now widely viewed as the de facto strategic rival of the United States and a potential challenger to US global supremacy, particularly in the Asia Pacific.

Many observers have described Chinese diplomacy as newly and increasingly assertive in the wake of rising tensions in the South China Sea. How should we understand this ‘new’ assertiveness?

A Larger Security Role is Way Off for India

Is India emerging as a great power? French President François Hollande’s recent trip to India included a joint statement with Indian Prime Minister Narendra Modi, which focused on security cooperation. This encouraged some speculative enthusiasm regarding India’s ‘widening role’ in Asia’s security.

For some years now, there have been rising expectations that India would be part of the Southeast Asian balance of forces and would act as a counterweight in the Indian Ocean to China’s increasing and capricious dominance.

It is Still Risk-On for Emerging Markets

We think that it is still too early to say whether Friday’s price action was simply profit taking ahead of the weekend, or the resumption of overall negative market sentiment. We think the global backdrop remains conducive for risk, at least near-term. China concerns are on the back burner, while markets are still skeptical about the prospects for Fed tightening. Commodity prices are the potential spoilers to a resume risk rally, as oil ended last week on a sour note.