Trade surplus drops
The country’s trade surplus fell last month from a year earlier due to a drop in exports to debt-hit Europe and slowing sales to China, the government said yesterday. The trade surplus was US$2.33 billion, compared with US$2.48 billion in March last year. Exports fell to US$47.36 billion, down 1.4 percent year-on-year, while imports also dipped 1.2 percent to US$45.03 billion on falling purchases of products including memory chips, it said. “Sales to the EU have dramatically dropped in the aftermath of its fiscal crisis and sales to China have considerably slowed, limiting our export growth,” the Knowledge Economy Ministry said. Exports to the EU, South Korea’s second-largest trading partner after China, fell 20 percent, while sales to China grew only 0.7 percent in the same period, it said. In March last year, exports to China posted year-on-year growth of 9.2 percent.
Inflation high: Kocherlakota
Inflation will be above the Federal Reserve’s 2 percent target next year, Minneapolis Federal Reserve President Narayana Kocherlakota said on Saturday, suggesting he sees pressure building for the central bank to lift interest rates. “I’m expecting inflation to be 2 percent this year, and 2.3 percent next year,” Kocherlakota told the Midwest Economics Association’s annual meeting. The Fed has kept the country’s short-term borrowing costs near zero for more than three years, and its policy-setting panel has said it expected to need to keep them there through late 2014. Kocherlakota, a monetary policy hawk, has said he believes the Fed should act to raise rates well before then, but his view is in the minority at the Fed, where most see inflation at or below the target in coming years, based on projections issued in January. Fed Chairman Ben Bernanke earlier this week said the economy would need to grow more quickly to ensure continued progress in reducing the unemployment rate, which now stands at 8.3 percent.
Mazda recalling 62,000 cars
Mazda Motor and its joint venture partners in China began recalling more than 62,000 vehicles yesterday to fix problems with anti-lock braking systems that could cause false warnings, China’s quality regulator said. The three-party joint venture with Ford Motor and Chongqing Changan Automobile will recall 58,949 Mondeo sedans and 3,496 S-Max vehicles and replace problematic parts, China’s General Administration of Quality Supervision, Inspection and Quarantine said on its Web site. The move comes on the heels of Mazda recalling 16,857 vehicles in September 2010 because of a similar problem.
Devalue currency, IMF says
The IMF is calling on the impoverished country to devalue its currency. Tsidi Tsikata, head of the IMF mission for Malawi, told journalists in the capital, Lilongwe, on Saturday that the kwacha’s official rate should be close to black market rates, which range between 280 and 300 kwacha to the US dollar. This week, the official rate was about 170. An overvalued currency can hurt exports. President Bingu wa Mutharika has resisted devaluation calls. Finance Minister Ken Lipenga, who appeared alongside Tsikata at Saturday’s news conference, was noncommittal on the exchange rate. Western donor nations and multilateral agencies have suspended aid to Malawi because of questions about economic policy and concerns human rights are under threat.