Economy contracted in Q2
The economy shrank in the second quarter as vehicle manufacturing slumped because of parts shortages in the aftermath of the tsunami disaster in Japan. The government said yesterday that the economy contracted 0.2 percent in the April to June quarter from the previous quarter. It cut its forecast for this year’s economic growth to a range of 3.5 percent to 4 percent from 3.5 percent to 4.5 percent. Second quarter GDP increased 2.6 percent compared with a year earlier, slowing from 3.2 percent growth in the first quarter.
Budget deficit slashed
The government said yesterday it would balance its public finances sooner than expected, slashing this year’s projected budget deficit to 1.5 percent from 2.5 percent. As eurozone partners work on ever tighter austerity plans to balance their books, Berlin leads the pack in the strength of its finances — it had a deficit of 3.3 percent last year, just above the EU ceiling of 3 percent despite having spent heavily on stimulus programs to offset the worst recession since 1945. “The positive development this year will continue until 2015, which will allow us to balance the accounts in 2014,” the finance ministry said in a monthly report published on its Web site.
FDI projections raised
The country may receive as much as US$20 billion in foreign direct investment (FDI) this year, 11 percent more than a prior forecast, as the second-biggest Latin American economy’s low wages and proximity to the US draw producers. Economists have also boosted their forecast for FDI in the most recent central bank survey on Aug. 1, saying the that country may get US$19.7 billion this year compared with US$19.5 billion last month.
BMW plans wind plant
German auto giant BMW plans to build four wind turbines to power a factory with enough electricity to assemble hundreds of vehicles a day, auto newspaper Automobilwoche reported yesterday. The wind farm should be able to produce the necessary energy by late 2013, the company said. BMW said it wants its Leipzig factory to become an example of green energy production, one that could eventually be followed in assembly plants worldwide. The Leipzig factory is forecast to produce about 200,000 vehicles this year at a rate of 740 a day.
Chinese bank’s profits jump
China Construction Bank (中國建設銀行) said its first-half net profits jumped 31 percent on strong growth in fee-based business, such as financial consulting and advisory services, as well as higher interest rates. The bank, in which Bank of America owns a 10 percent stake, earned 92.8 billion yuan (US$14.5 billion) in the six months to the end of June, compared with 70.7 billion yuan a year earlier, the company said in a statement filed to the Shanghai Stock Exchange on Sunday.
Dongbu Steel eyes Thailand
South Korea’s Dongbu Steel Co bought 40 rai (6.4 hectares) of land from Hemaraj Land and Development PCL to build a plant in Thailand, Hemaraj said in an e-mailed statement. Thai Dongbu Steel Co will produce various steel products and supply home-appliance manufacturers, including the LG Group. The new plant will start production in December next year, according to the statement.