The World Bank and Asian Development Bank have recently advocated the importance of Indonesia’s manufacturing sector. Manufacturing is considered a key sector for the advancement of the country’s overall economy and as an important source of formal employment. The reality on the ground since the 1997–98 economic crisis, though, reveals a troubling picture about the sector.
The European Central Bank lowered interest rates as the Bank of England kept its record low rate steady on low inflation and falling wages in Britain. The ECB decision comes soon after France and Germany showed disappointing GDP growth and the possibility of a recession. Italy also fell into its third recession in as many years.
Dovish monetary policy was expected from the ECB despite German resistance, as German politicians pressed for further austerity in peripheral nations. Germany has seen a growing current account surplus in recent years.
Recent research has suggested that the Philippine economy may be set to experience long-term growth, expanding even further than the 7.2% estimated in the absence of common election-related costs. The department of finance are positive about the projected future for economic growth, and undersecretary of finance, Gil Beltran, suggested that the Philippines may even begin to pick up a greater amount of speed throughout the medium term, as a result of its strong macroeconomic fundamentals.
The global recovery is strengthening but remains weak. A global growth target, pursued by the G20, could significantly strengthen this recovery process. But such a macroeconomic target needs to be supported by microeconomic reforms.
The ISM Manufacturing index rose by 2 points to 59, above estimates of 57, according to the Institute for Supply Management. Any number above 50 indicates expansion. With an expanded rate of manufacturing, the U.S. is seeing manufacturing expand at the fastest rate in three years. The index also saw a high for new orders that indicate demand has reached its strongest level since 2004.
The Japanese economy continues to defy gravity despite a Mount Fuji of debt that has no parallel in Western countries, and the worst problem of demographics among all the world’s rich nations. Japan’s net debt-to-GDP ratio is about 135%, even higher than the Southern European nations when they plunged into crisis. Meanwhile, the World Bank’s figures show one of the world’s lowest fertility rates of 1.39 births per woman, leading to rapid population decline.
The ASEAN Economic Community, planned to come into effect in 2015, is expected to liberalise goods, capital and skilled labour flows in the ASEAN region. While there has been considerable progress in the area of trade integration, financial integration still lags behind. The ASEAN Banking Integration Framework, which aims to liberalise the banking market by 2020, could help pave the way for further integration and the entry of ASEAN banks into regional banking markets.
Greater banking integration in ASEAN will benefit the region.
Economic experts expected the unemployment rates to stay at 6% or below this July, but instead they increase to 6.25%, allowing the United States to shine brighter for the first time since 2006. Though many business leaders in America believe its unemployment rate to be a sham because the federal agency does not count people who stopped looking for work and those that are underemployed.
Some may have heard various reports throughout the world of the Ebola virus beginning to spread. While there have been a few suspected cases in various areas, countries in Africa are now beginning to close their borders to prevent any more of an outbreak. In fact, South Africa is refusing to admit any person from the infected areas of West Africa.
Jobless claims fell by 14,000 to 298,000 in the week ending August 16th, according to the Department of Labor. This was lower than most analysts had expected, spurring speculation that the Federal Reserve may tighten its monetary policy faster than predicted. The previous week’s claims were revised up by 1,000.
The 4-week moving average for claims rose from 296,000 for the four weeks prior to August 9th to 300,750 for the four weeks prior to August 16th, or a change of 1.6%. However, the 4-week moving average is down nearly 10% from a year ago.
