The Reserve Bank of Australia yesterday remained on the sidelines as it waits to analyze the economic impact of a fiscal injection designed to catapult Australian Prime Minister Scott Morrison to a come-from-behind election victory.
Governor Philip Lowe kept the cash rate at 1.5 percent — as expected by money markets and all but one economist.
“Growth in household consumption is being affected by the protracted period of weakness in real household disposable income and the adjustment in housing markets,” while drought is also hurting farm output, Lowe said in a statement.
“Offsetting these factors, higher levels of spending on public infrastructure and an upswing in private investment are supporting the growth outlook, as is the steady growth in employment,” he added.
The bank has been confounded by contradictions showing up in the economy: Growth slowed in the second half of last year to an annualized 1 percent from almost 4 percent in the first six months, while at the same time, unemployment dropped to an eight-year low of 4.9 percent and government coffers are awash with tax revenue from strong employment.
“The GDP data paint a softer picture of the economy than do the labor market data,” Lowe said. “The Australian labor market remains strong.”
The bank is likely to have to downgrade its economic forecasts when it releases next month’s quarterly update and markets are pricing in at least one rate cut this year with the possibility of a second. A number of top economists also see an easing.
While Sydney house prices have slumped 13.9 percent from a mid-2017 peak and a credit squeeze is exacerbating the downturn, Lowe has been taking comfort from robust hiring and investment.
“Conditions remain soft and rent inflation remains low,” he said of housing. “Credit conditions for some borrowers have tightened a little further over the past year or so. At the same time, the demand for credit by investors in the housing market has slowed noticeably.”
The global backdrop is not providing much help — although commodity prices have remained strong and exports are booming — as Washington and Beijing still work toward a trade deal.
Australia is the most China-dependent economy in the developed world, so the trade frictions only add to the cloud over the picture, while the Brexit saga continues to unsettle markets.
“Growth in international trade has declined and investment intentions have softened in a number of countries,” Lowe said. “In China, the authorities have taken steps to ease financing conditions, partly in response to slower growth in the economy.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained