Rate hike rethink expected
The economy grew just 0.1 percent in the April-June quarter, reinforcing a growing expectation that a shake-out in global markets will prompt the central bank to rethink a rate hike this month. Only around a quarter of respondents in a Reuters poll said they now saw the Bank of Japan raising rates this month. Most saw the central bank getting back on track by next month, although some analysts warned of another slow quarter of economic growth ahead. The GDP figure fell short of the modest consensus forecast for a 0.2 percent increase, partly due to weak exports, although analysts said that in itself would not prompt the central bank to hold fire.
Inflation forecast raised
The Reserve Bank of Australia pushed its inflation forecast up half a percent yesterday on continued expectations of tightness in the labor market. Inflation appeared to be running at the top of its target range, the central bank said in a statement on monetary policy. The bank lifted its inflation forecast for the year ending Dec. 31 to 3 percent from the 2.5 percent predicted in its May statement. The hike in the inflation forecast comes a week after the bank lifted the country's benchmark interest rate to 6.5 percent from 6.25 percent -- the fifth quarter percentage point hike since 2004.
Arroyo wants to cut deficit
President Gloria Arroyo said yesterday that she would take steps to trim the country's budget deficit amid warnings that poor tax collections in the first half is putting fiscal reforms at risk. Last month the government said weak tax collection pushed the first half budget deficit to 41 billion pesos (US$899.71 million), exceeding the 31.3 billion-peso target for the six months to June. Arroyo, speaking to a business group, said the drift has been arrested. "Let us put the shortfall in context. We were not on target for the first half of this year but we have met our target for July," she said without giving figures.
`Super low' fares on offer
Malaysia Airlines said yesterday that it would offer "super low" airfares for advanced bookings this week for international destinations. Travelers can enjoy up to 75 percent discount on all air fares, except those for Australia, if they book online for travel between next January and May. One way fares start from US$8 for destinations in Southeast Asia and US$89 in North Asia and the Indian sub-continent. Fares start from US$205 to Europe and the Middle East, the airline said. The offer came three days after the Virgin Group announced it would take a 20 percent stake in AirAsia's long-haul budget carrier.
Chery to open Iran plant
Chery Automobile Co (奇瑞汽車), China's biggest domestic automaker, said it will open a factory in Iran, expanding its fast-growing foreign ties soon after the announcement of ventures with Chrysler and Fiat. The US$370 million plant in Babol will be developed with Iran's biggest automaker, Khodro Co, and Canadian investment firm Solitac, Chery said on its Web site. Chery signed a deal last month with Chrysler Group to make cars for export to the US and other markets. Last week, Chery and Fiat Group unveiled a deal to produce Fiat and Alfa Romeo models for sale in China.