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| Issue 480 | 11 Oct 2021 |
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World news: WTO raises global trade volume forecast to 10.8% |
| The World Trade Organization (WTO) has revised its growth forecast on global merchandise trade volume in 2021 to 10.8% from 8.0% predicted in March. Trade growth is expected to slow to 4.7% in 2022 (up from 4.0% previously), as merchandise trade approaches its pre-pandemic long-run trend. WTO added that recent supply-side issues such as semiconductor scarcity and port backlogs may strain supply chains and weigh on trade in particular areas, but they are unlikely to have large impacts on global aggregates, warning that the biggest downside risks come from the pandemic itself. |
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| Asia and Australasia |
Hong Kong: Private sector continues to expand in September
The IHS Markit Hong Kong Purchasing Manager’s Index (PMI) stood at 51.7 in September, versus 53.3 in August. Despite the fall, September figure reflected the eighth successive month in which the Hong Kong private sector registered better business conditions. IHS Markit mentioned that a stable COVID-19 situation enabled business conditions to continue improving, driving higher demand and output in September. That said, foreign demand remained weak in September. New business from abroad, including Mainland China, declined for a fourth consecutive month and at rates faster than August.
New Zealand: Central bank lifts interest rate to 0.5%
The Reserve Bank of New Zealand has raised its benchmark interest rate to 0.5% from a record-low of 0.25%, in a bid to contain inflation and support maximum employment. The central bank stated that a broad range of economic indicators highlight that the New Zealand economy has been performing strongly in aggregate. Capacity pressures remain evident in the economy, particularly in the labour market. However, the bank is aware that the latest COVID-19 restrictions have badly affected some businesses in Auckland and a range of service industries more broadly. The bank now sees headline inflation to increase above 4% in the near term on the back of higher oil prices and the impact of supply shortfalls before returning towards the 2% over the medium term. |
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| Europe |
Eurozone: Retail sales barely rise in August
According to Eurostat, the seasonally adjusted volume of retail trade in the Eurozone rose by 0.3% mth/mth in August, reversing a 2.6% decline in July. This also posts the third monthly growth in four months. In particular, a significant growth is seen in mail orders and internet sales (+9.0%), constituting an overall 1.8% expansion for the non-food products category. However, sales of food, drinks and tobacco fell for a fifth straight month (-1.7%). On an annual basis, the volume of retail sales remained unchanged in August following a 3.1% rise in the prior month. As energy prices remain elevated and the recovering effect wanes over time, some analysts expect Eurozone’s consumption growth to fade over the course of Q4. |
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| North America |
US: US urges China to fully honour phase-one trade deal
Last week, US Trade Representative (USTR) Katherine Tai delivered a speech outlining US government’s new approach to the US-China bilateral trade relationship. Ms. Tai said she would seek a meeting with Liu He, her counterpart in China, over China’s performance under the phase-one trade deal signed in 2020 and other trade concerns. She also stressed that the Biden administration would start a targeted tariff exclusion process to exempt some goods from tariffs to align trade policy with Biden’s priorities. The USTR office announced later that it is seeking public comments from October 12 through December 1 on whether to reinstate previously extended exclusions on 549 import product categories, including industrial components, thermostats, medical supplies, bicycles and textiles. Afterwards, Xinhua News Agency said a virtual talk was held between Mr. Liu and Ms. Tai, adding that the Chinese side negotiated over the cancellation of tariffs and sanctions, and clarified its position on China’s economic development model and industrial policies. |
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