Wed, Mar 26, 2003 page12

• World Business Quick Take

  • AGENCIES
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  ■ US economy
  War may hinder recovery

  The war in Iraq poses the biggest obstacle to a US economic recovery, according to a survey of business economists released Monday. But the experts surveyed by the National Association of Business Economists (NABE) said the chances of a double-dip recession were "less than 50-50." The survey found that 41 percent said "international military operations and homeland defense were the biggest problems facing the economy," the NABE said in a statement. "A growing federal deficit was identified as the next most pressing issue." Some 80 percent of NABE respondents feel monetary policy is about right, with half expecting short-term rates will be unchanged in six months and 37 percent expecting rates will be between 25 and 50 basis points higher.

  ■ Banking

  BOJ plans to buy shares

  The Bank of Japan said yesterday it will expand an unprecedented plan to buy shares from banks by a half to help prevent potential market confusion triggered by the US-led war in Iraq. In its first major decision under new governor Toshihiko Fukui, the central bank decided to lift its stock purchasing target immediately to ¥3 trillion (US$25 billion) from ¥2 trillion. "This decision is based on the need to enhance efforts to reduce stock fluctuation risks for banks amid the war with Iraq and the recent intensified movements in stock prices," the central bank said in a statement.

  ■ Airlines

  SA to cut flights to Japan

  Singapore Airlines Ltd said yesterday it will reduce its scheduled flights on three routes between Singapore and Japan in the next two months, hit by weak demand due to the war against Iraq. The decision concerns the airline's services linking Singapore with Japanese cities of Nagoya, Hiroshima and Fukuoka as part of its plan to curtail 65 flights a week worldwide. Singapore Airlines said it will reduce its seven weekly flights to five for the Singapore-Fukuoka route beginning April 1 and start downsizing the Singapore-Nagoya service by the same scale on April 8. The Singapore-Hiroshima route will be cut from four flights a week to two, effective April 1, it said.

  ■ Beijing Jeep

  Mitsubishi to buy stake

  Mitsubishi Motors is set to take a stake in severely troubled Beijing Jeep, the joint venture between DaimlerChrysler and Beijing Automotive, after signing a letter of understanding, state press reported Tuesday. "Mitsubishi will become a new shareholder ... and this will usher our cooperation onto a new stage," said the Business Weekly, citing Tong Zhiyuan, executive vice-president of Beijing Jeep. Further financial details were not immediately available. The German car maker currently owns 42.4 percent of Bejing Jeep, with China's Beiijng Automotive holding a 57.6 percent stake.

  ■ Delta Air

  Routes to be reduced

  Delta Air Lines Inc, the third-largest US carrier, will reduce flights by 12 percent as the war in Iraq hurts air-travel demand and increases the risk that more airlines may seek bankruptcy protection. The cuts will start March 27 for US flights and in April for service to Europe, including two seasonal routes to Rome, Delta said in a statement. The changes will last at least through April and maybe longer if demand remains weak, it said.
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