Businessmen Panel welcomes Saudi Arabian investment in CPEC
LAHORE (Staff Reporter): The Businessmen Panel (BMP) of FPCCI has welcomed the Kingdom of Saudi Arabia’s investment in China Pakistan Economic Corridor (CPEC) which provides another door of FDI into Pakistan. Chairman BMP and former minister of commerce and industries of Punjab, Mian Anjum Nisar said, “Saudi Arabia is the first country that we have invited to become a third partner in CPEC.” He said Saudi partnership in CPEC is being viewed as a major boost for cash-strapped Pakistan facing an economic crisis and critical balance of payments pressure. Foreign debt repayments have left the country with less than two months of imports worth of foreign exchange reserves. "It will help counter negativism about CPEC emanating from India and the United States, and it also highlights the importance of Pakistan as the pivotal player in regional economic cooperation". Anjum Nisar also said Kingdom is also expected to invest in the mega oil city project in Gwadar which is important for us too.
The 80,000-acres mega oil city at Gwadar will be used to transport oil from the Gulf region to China through the Gwadar Port. This will reduce the distance to just seven days from Gwadar to the Chinese border.
German growth slows in September as factories shift into lower gear: PMI
BERLIN (Reuters): German private sector growth slowed slightly more than expected in September, with a surprise surge in services activity not enough to offset a sharp slowdown in manufacturing, a survey showed on Friday. Markit’s flash composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that together account for more than two-thirds of the economy, fell to 55.3 from 55.6 the previous month. This undershot the consensus forecast in a Reuters poll of economists who had expected a slowdown to 55.4. Still, it was well above the 50 mark that separates growth from contraction. Manufacturing growth slowed to reach its lowest level in more than two years, the survey showed, with the respective sub-index falling to 53.7 from 55.9. Analysts had expected a smaller drop to 55.7. New export orders in manufacturing fell below the survey’s crucial 50 mark for the first time since July 2015 and purchasing managers scaled back their expectations for future output.
“The service sector was left to do most of the heavy lifting in September, as manufacturing put in its worst overall performance since August 2016,” said Phil Smith, Principal Economist at IHS Markit. “Manufacturing new orders, however, were broadly flat as export sales declined for the first time in more than three years.”
Services business activity increased unexpectedly. Markit’s sub-index for the sector rose to 56.5 from 55.0 in the previous month. This was much better than the forecast of analysts who had predicted a stable reading.
Services companies continued to hire staff at a pace not seen in nearly 11 years and their business expectations improved further, the survey showed.
“Falling backlogs of work in the manufacturing sector suggests that capacity may have finally caught up with demand, so there’s a good chance the pace of factory job creation will lose momentum in coming months,” Smith said.
Japan inflation edges up but way below target in August
TOKYO (AFP): Prices in Japan edged up modestly in August, according to government data, as the world's third-largest economy continues its years-long battle with deflation. Inflation stood at 0.9 percent year-on-year in August, still far below the Bank of Japan's two-percent target, even though slightly higher than 0.8 percent in July and June and 0.7 percent in May. The latest figure was in line with market consensus. With fresh food and energy stripped out, prices rose by even less -- just 0.4 percent year-on-year in August, the internal affairs ministry said. Japan has battled deflation for many years and the central bank's ultra-loose monetary policy appears to be having limited impact. The Bank of Japan will not raise interest rates "for an extended period of time", its chief said after the latest rate-setting meeting, even as US and European peers tighten monetary policy. Deflation is bad for the economy partly because the expectation of falling prices discourages spending and dampens growth.
The latest data come a day after Prime Minister Shinzo Abe won comfortable re-election as leader of his ruling party, setting him on course to become Japan's longest-serving premier.
During the election campaign for the vote, Abe said he wanted the economy to strengthen enough to allow the central bank to wind up the current super-loose monetary policy "by the end of" his new three-year term.
Analysts say Abe's re-election means that the government will take active fiscal measures to boost the still-fragile economy along with the central bank.
French business growth falls short of expectations in Sept: PMI
PARIS (Reuters): French business activity grew at a much slower pace than expected in September as companies struggled to keep prices competitive amid softening demand, a survey showed. Data compiler IHS Markit said the preliminary reading of its composite purchasing managers index fell to 53.6 from 54.9 in August, much weaker than the 54.7 expected on average in a Reuters poll of economists. The result was the lowest since December 2016 and brought the index closer to the 50-point level dividing an expansion in activity from a contraction. IHS Markit said the PMI for the dominant services sector dropped to 54.3 from 55.4 in August, missing expectations for only a slight dip to 55.2. Service providers saw input costs rise at rates not seen since early 2011, while selling prices were nearly flat with many survey panelists reporting higher fuel and payroll bills. High input costs also strained manufacturers’ margins, and the sector’s PMI fell to 52.5 from 53.5, well below an average forecast of 53.3.
“Companies are really struggling to pass on higher costs onto customers as the demand environment is really just not strong enough,” IHS Markit Chris Williamson said.
He said that the latest survey suggested the economy had grown about 0.4 percent in the third quarter.
On a positive note, firms continued taking on more workers at a healthy pace, especially in the service sector, which is by far the biggest employer in France. Meanwhile, confidence in future output also remained high.