World Bank raises East Asia growth forecast as Brexit impact likely to be limited
The World Bank slightly raised its 2016 economic growth forecast for developing East Asia and the Pacific on Wednesday, saying that Brexit is unlikely to have any significant near-term impact on growth in the region.
The Washington-based lender now expects the developing East Asia and Pacific region, which includes China, to grow 6.4 per cent in 2016 and 6.2 per cent in 2017. Its previous forecast in April was for 6.3 per cent growth in 2016 and 6.2 per cent in 2017.
“Growth in the region is expected to remain broadly resilient during 2016-2018,” the World Bank said in its latest East Asia and Pacific Economic Update report. The real reason Brexit could influence East Asia’s ‘great game’. The Bank kept its 2016 and 2017 growth forecasts for China unchanged at 6.7 per cent and 6.5 per cent, respectively, but trimmed its 2018 growth view for China by 0.2 percentage point to 6.3 per cent.
Growth projections for Thailand were raised to 3.1 per cent for both 2016 and 2017, up from 2.5 per cent and 2.6 per cent previously. “In Thailand, growth will recover gradually to 3.3 per cent in 2018, reflecting the effects of increased public investment, improving consumer confidence, and continued expansion in services including tourism,” the World Bank said.
IMF chief economist sees no danger of U.S. economy overheating
The U.S. economy is not in danger of overheating, and the Federal Reserve should continue its data-dependent approach to another interest rate hike, the International Monetary Fund chief economist Maurice Obstfeld said on Tuesday.
Obstfeld told a news conference that the Fed's decision not to go for a second rate hike in September "was a very appropriate balancing of the risks in the economy."
"At the moment, inflation is below their target levels, wage pressures are moderate, and so there doesn't seem to be a great danger of overheating," Obstfeld said.
Oil prices rose
Oil prices rose in early trading on Wednesday after a report that U.S. fuel inventories may have fallen for a fifth straight week, but contracts remained near the $50 marker where many traders currently see fair value for crude.
U.S. West Texas Intermediate (WTI) crude futures were trading at $49.22 per barrel at 0649 GMT, up 53 cents, or 1.1 percent, from their last settlement. In international oil markets, benchmark Brent crude was trading at $51.38 per barrel, up 51 cents, or 1.0 percent.
Traders said the higher prices were largely a result of a report by the American Petroleum Institute (API) late on Tuesday showing that U.S. crude inventories likely fell for a fifth straight week, declining by 7.6 million barrels. [API/S]
"All eyes now turn to the EIA crude inventory numbers tonight," said Jeffrey Halley, senior market analyst at brokerage OANDA in Singapore, adding that another confirmed draw in crude stocks would likely push WTI over $50 per barrel.
Reference: South China Morning Post,Reuters
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