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Wed, Oct 15, 2003 - Page 12 News List

World Business Quick Take


■ Confidence
S Korea sees 5-year low

Consumer confidence in South Korea hit a five-year low last month as the central Bank of Korea said yesterday this year's economic growth will fall below 3 percent because of weak consumption and investment. The consumer evaluation index, which measures current consumer sentiment, fell to 59.9 last month from 63.9 in August, the National Statistical Office (NSO) said. The fall reflected a prolonged slump in consumer confidence amid uncertainty over the long-awaited economic recovery. It marks the lowest level since November 1998, when the data was first collated, the NSO said. The Bank of Korea separately said weaker-than-expected domestic consumption, coupled with meager investment, would drag the GDP growth rate for the fourth quarter to December down to below its latest forecast of 3.8 percent year-on-year.

■ Capital flow

Thaksin plans new tax

Thai Prime Minister Thaksin Shinawatra said yesterday that his government is planning a tax on fast-capital flow in a bid to curb speculation of the baht in the foreign exchange market. Thaksin's comment immediately led to a drop in the value of baht, which has strengthened to a three-year high against the dollar. Some businesspeople have worried that the unusually strong baht will make exports more expensive. Thaksin told reporters that the Finance Ministry and the central bank are working on details of the tax plan, particularly the definition of fast capital flow. "We haven't reached a conclusion yet about the definition of fast capital flow whether it should be 3-month, 1-month or 7 days," he said.

■ Airlines

Valuair to launch next year

Singapore's new no-frills airline Valuair will start its operations early next year, local media said yesterday. Valuair founder and former Singapore Airlines chief executive Lim Chin Beng expects to obtain an air operators' certificate early next year, The Straits Times newspaper reported. Valuair also signed an agreement with Singapore's DBS Bank on Monday to use its automated teller machines for ticket payment, the paper said. The budget airline can expect to face stiff competition from Malaysia's AirAsia, which has also entered a similar ticket-sale arrangement with the bank and the city-state's biggest telecommunication company, Singtel. Valuair will operate short-haul flights out of Changi International Airport, although destinations have yet to be confirmed, it said.

■ Free trade

Mexico, Japan still divided

Japan and Mexico are still divided on the terms of a bilateral free trade accord but are making progress in the eleventh-hour talks ahead of a visit to Tokyo this week by Mexican President Vicente Fox, the Japanese foreign minister said yesterday. "The talks are moving ahead, albeit little by little," Foreign Minister Yoriko Kawaguchi told a regular news conference on the eve of Fox's arrival. The sensitive issue of agricultural trade has bogged the talks down, with Mexico pushing to remove high Japanese tariffs on pork while Japan has rejected the idea to protect domestic farmers. Trade, farm and other ministers of the two nations met in Tokyo Monday in a bid to secure a last-minute breakthrough for concluding a free trade agreement while Fox is here but remained divided over a range of issues.

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