GDP growth forecast raised
The city-state raised its growth forecast for this year after the economy unexpectedly expanded last quarter, supporting the central bank’s decision to forgo stimulus. The economy will grow between 3.5 percent and 4 percent this year and as much as 4 percent next year, the trade ministry said in a statement yesterday. It had previously forecast growth of up to 3.5 percent for this year. GDP expanded an annualized 1.3 percent last quarter from the previous three months, compared with a 1 percent decline estimated earlier. Externally oriented sectors, such as manufacturing, wholesale trade and transportation and storage are likely to support growth, in line with a slight pickup in the global economy,” the trade ministry said yesterday.
Allied Irish issues bond
Allied Irish Banks on Wednesday issued its first unsecured bond since the financial crisis forced Ireland to take an international bailout, following the lead of rival Bank of Ireland. Allied Irish Banks’ 500 million euros (US$671.4 million) senior unsecured bond issue was oversubscribed, attracting 3.2 billion euros of orders. The bond was priced at mid-swaps plus 235 basis points, compared with a price of plus 220 basis points achieved by Bank of Ireland in May. Earlier on Wednesday, Permanent TSB became the first Irish lender since the crisis to issue mortgage-backed securities with a 500 million euro issue. Irish Minister of Finance Michael Noonan said the two issues, which came as the country prepares to exit its EU-IMF bailout next month, were further evidence of improved international investor sentiment toward both institutions and Ireland.
Budget deficit narrows
The budget deficit narrowed last month from a year earlier as accelerating economic growth boosted sales taxes and stamp duty on property purchases. Net borrowing excluding temporary support for banks was ￡8.1 billion (US$13 billion) compared with ￡8.2 billion a year earlier, the Office for National Statistics said in London. Tax receipts increased 3.2 percent, with value-added tax rising 6.4 percent and stamp duty soaring 46 percent. Spending increased 1.2 percent. The figures pave the way for Chancellor of the Exchequer George Osborne to cut his borrowing projections next month, with a resurgent economy putting Britain on course for its smallest budget deficit in five years.
Toyota, Chinese in deal
Toyota yesterday said it plans to develop components for hybrid vehicles with two Chinese automakers, in an unprecedented technology-sharing deal aimed at boosting green car sales in the world’s largest vehicle market. The Japanese giant is already assembling hybrids in China with First Automobile Works and Guangzhou Automobile Group, the third and sixth-ranked Chinese car manufacturers respectively. However, the plan to share key hybrid technology with an overseas partner marks a first for Toyota and a shift away from Japanese carmakers’ traditional reluctance over such deals for fear of losing their competitive edge. Previously, Toyota would make key components, such as batteries and motors, in high-cost Japan and then ship them to joint ventures overseas. However, that drove up the price of models such as its Prius hybrid, which has seen sluggish sales in China. The new arrangement is expected to cut costs and lead to hybrid cars tailored to Chinese consumers, a Toyota spokeswoman said.