Economy signals slowdown
After posting one of the best growth performances among peers in the second quarter of this year, the country’s economy is showing signs of a slowdown that some investors have said would morph into a technical recession later in the year. Gross domestic output rose 5.2 percent during the three months through June from a year earlier, in line with the median estimate of 5.3 percent in a Bloomberg survey. While that keeps the country’s place among the world’s fastest-growing nations, a deeper dive into the data shows consumers and investors starting to hit the brakes, and government spending and exporters preventing a more rapid slowdown. Private consumption, which is estimated to make up nearly two-thirds of the economy, grew 6.3 percent on an annual basis, slowing from a revised 9.3 percent in the first quarter.
Producer inflation drops
The country’s producer inflation last month cooled amid softening domestic demand, pointing to a steady slowing in growth in the world’s second-biggest economy as it confronts heightened risks to the outlook from a heated trade war with the US. Consumer inflation, on the other hand, picked up more than expected, although policymakers are likely to stay focused on growth rather than pricing pressures as US President Donald Trump raises the stakes in the tariff war. The producer price index, a gauge of industrial profitability, rose 4.1 percent from a year earlier, compared with a 4.6 percent increase in July, National Statistics Bureau data showed yesterday. Analysts polled by Reuters had expected the index to rise to 4 percent last month. On a monthly basis, the index picked up from 0.1 percent in July to 0.4 percent last month.
‘Dieselgate’ trial begins
The first major German court case against Volkswagen AG over the “dieselgate” scandal that has shaken up the auto industry got under way yesterday, as investors pursue the world’s largest automaker for billions in compensation. A regional court in Brunswick began examining whether the auto giant should have informed investors sooner about so-called “defeat devices” it built into 11 million cars worldwide to fool regulatory emissions tests. The case is supposed to clear up 193 questions common to about 3,650 claims totalling about 9 billion euros ($10.5 billion). At issue is a 40 percent plunge in company stock over two days in September 2015, which wiped billions off its market value.
Court orders partial refund
A court ordered the return to Malaysia of about S$15.3 million (US$11.1 million), just a small portion of total seized in the city-state as part of a probe into transactions linked to scandal-hit Malaysian state fund 1Malaysia Development Bhd (1MDB), lawyers for the fund and the Malaysian government said yesterday. The city-state is among at least six countries investigating claims that about US$4.5 billion was siphoned off from 1MDB, a fund founded by former Malaysian prime minister Najib Razak. In 2016, authorities said they had seized S$240 million in cash and properties as a result of investigations into 1MDB-related fund flows through the city-state. In May, the city-state and Malaysia agreed to cooperate on returning the funds to the Malaysian government, and the court order cleared the way for the first repatriation of funds. The funds are to be transferred to a special 1MDB recovery account in Kuala Lumpur.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
DEVELOPING TALENT: The electronics contractor is looking to recruit people to work in core tech fields and emerging industries like electric cars and robotics Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, has launched a recruitment drive, offering a monthly salary of no less than NT$45,000 (US$1,485) to university graduates. For those with a master’s degree, the starting pay would be NT$52,000 per month at the minimum, while doctorate degree holders would receive at least NT$60,000 a month, Hon Hai said a statement issued early this week. The latest recruitment drive is aimed at attracting talent in core technology fields — artificial intelligence, semiconductors and next-generation mobile communications — and emerging industries — electric vehicles, digital healthcare and robotics, the
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