August inflation up 7.55%
India’s annualized inflation rose to 7.55 percent last month, official data showed yesterday, further reducing the chances of an interest rate cut from the central bank next week. The Central Bank of India will meet on Monday to consider its interest rate policy, as well as a 12 percent rise in the price of diesel ordered by the government that will push inflation higher. The diesel price hike was hailed by some as a sign of intent by the government that it is prepared to tackle difficult economic reforms and the widening hole in the public accounts. The wholesale price index rose to 7.55 percent from 6.87 percent in July, which was a near three-year low.
S&P raises rating to ‘A+’
Standard & Poor’s (S&P) upgraded South Korea’s sovereign credit rating from “A” to “A+” yesterday, citing stability on the Korean peninsula and the resilience of Asia’s fourth-largest economy. It was the ratings agency’s first upgrade for South Korea in seven years and followed similar moves in the past few weeks by Moody’s Investors Service and Fitch Ratings. Although South Korea’s economy is slowing, the agency said it expected the country’s “economic and financial metrics to continue to support the long-term foreign currency rating at the A+ level.”
GDP growth cut to 2 percent
Brazil on Thursday lowered its GDP growth forecast for this year from 3 percent to 2 percent, but announced fresh stimulus measures to boost a sluggish economy expected to perform much better next year. Finance Minister Guido Mantega said the economy was showing signs of an uptick and should grow above 4 percent next year, boosted by recent measures to stimulate consumption and industrial production, as well as by a sharp interest rate cut. Mantega said the government was extending payroll tax breaks for 25 industry and service sectors, bringing to 40 the number of sectors that will benefit from the measure. The government earlier this week also ordered a reduction of up to 28 percent in companies’ electricity bills next year.
Huawei questions law
An official of Chinese telecoms equipment giant Huawei Technologies (華為) said he was concerned that new Australian laws to protect crucial communication networks could exclude companies from bidding for work simply because they are Chinese. John Lord, chairman of the subsidiary, Huawei Technologies (Australia) Pty Ltd, made the comments yesterday to an Australian parliamentary committee that is examining proposed laws to safeguard critical infrastructure from threats such as cyberattacks. The subsidiary was barred on security grounds from working on a national broadband network.
Disney warns on profit
Media and entertainment group Disney revealed on Thursday an unexpected US$50 million write-down at its movie studio and lower-than-expected summer advertising revenue at broadcaster ABC. The write-down was linked to a project that was abandoned, Disney chief financial officer James Rasulo said. Although he did not provide further details, the Wall Street Journal cited an unnamed source as saying that the move concerned a stop-action animated film directed by Henry Selick, whose credits include The Nightmare Before Christmas (1993), which Disney pulled the plug on last month.