ECONOMY
Rousseff budgets for deficit
Brazilian President Dilma Rousseff is to send Congress a 2016 budget with a primary deficit after she abandoned plans to reinstate an unpopular tax to raise revenues next year, Brazilian media reported on Sunday. Rousseff’s economic team decided it was best to present realistic budget numbers to avoid losing further credibility in the market, the O Globo, Folha de S.Paulo and Estado de S.Paulo newspapers reported, citing presidential aides. Without additional revenues, government officials warned last week it would be impossible to meet a fiscal savings target of 0.7 percent of GDP next year as originally planned in the budget, which was to be sent to Congress by yesterday. The absence of a primary fiscal surplus — the budget balance before interest payments — is likely to increase the risk of Brazil losing its prized investment-grade credit rating next year.
ECONOMY
Denmark GDP growth slows
Denmark’s economic expansion slowed as both exports and household demand declined. GDP grew 0.2 percent in the second quarter from 0.5 percent in the first, the statistics office in Copenhagen said yesterday, citing preliminary data. “This isn’t a strong number in any way,” Nordea chief economist Helge Pedersen said. Exports plunged 2.2 percent after growing 1.8 percent in the first three months of 2015. Household spending fell 0.5 percent after rising 0.6 percent. The GDP report comes a week after the government cut its forecast for economic expansion to 1.5 percent this year and 1.9 percent in 2016, citing a slow recovery in domestic demand.
ELECTRICITY
Renewable energy cost falls
The cost of producing electricity from renewable sources like solar and wind has dropped significantly during the past five years, while rising for power generated from natural gas, coal and nuclear, according to the International Energy Agency. “The cost of renewable technologies — in particular solar photovoltaic — have declined significantly over the past five years,” the Paris-based IEA said in a report called Projected Costs of Generating Electricity. “These technologies are no longer cost outliers,” the report said. The median cost of producing so-called baseload power that is available all the time from gas, coal and nuclear reactors was about US$100 per megawatt hour for this year compared with about US$200 per megawatt hour for solar, which has dropped from US$500 per megawatt hour in 2010. The findings come as more than 190 nations intend to broker a new climate agreement in Paris in December to limit future fossil-fuel emissions.
MANUFACTURING
UK factories worried
Just under half of UK manufacturers are worried by the possibility of a sharp slowdown in China’s economy and one in 10 are reviewing their business plans, a survey from an industry group showed on Sunday. The UK Engineering Employers’ Federation (EEF) said 47 percent of manufacturers were concerned by signs of a slowdown in China, which have rocked financial markets over the past week. Big manufacturing firms were most likely to be worried and also more likely to be looking at their business plans to take into account different scenarios, the survey showed. “Overall, UK factories send only a small proportion of their goods to Chinese customers, but a sharper slowdown would also see a halt to growth in export sales through supply chains in Europe,” EEF chief economist Lee Hopley said.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San