Business

Experts: More room for nation to back real economy

Published

2 years ago

20/08/2022

MNN

With monetary tightening in the United States expected to slow down, China is likely to have greater room for monetary easing and witness a softer deceleration in external demand, helping the nation to achieve stable full-year economic growth of above 4 percent, experts said on Thursday.

While the US Federal Reserve approved a bold interest rate hike of 75 basis points for the second straight month in July to combat inflation, Fed officials agreed “it likely would become appropriate at some point to slow the pace of policy rate increases”, according to the minutes of their July meeting, which were published on Wednesday.

The pace of rate increases, the Fed minutes said, will depend on the implications of incoming information for US economic outlook and risks to the outlook.

Experts considered the minutes to be a signal that the Fed may slow the pace of its rate hikes in the coming months to avoid overdoing tightening measures that could tip the US economy into a sharp recession.

This, in turn, will help maintain global economic momentum, reduce the capital outflow pressures facing emerging economies, including China, and create more favorable external conditions for the country’s growth, they said.

Wen Bin, chief economist at China Minsheng Bank, said China’s monetary policy will have greater room to support the real economy as spillover effects of the Fed’s tightening fade with reduced capital outflow pressures on China.

In a report last week, the People’s Bank of China, the nation’s central bank, pledged to provide more substantial and higher-quality support for the real economy, while keeping a close eye on the spillover effects of the economic situation and monetary policy adjustments in developed economies.

Bucking monetary tightening in the US, China’s central bank cut a key interest rate on Monday to support economic recovery.

The central bank conducted 400 billion yuan ($59.2 billion) in medium-term lending facility operations at an interest rate of 2.75 percent, down from 2.85 percent a month earlier.

Thanks to the rate cut, the country’s loan prime rates－market-driven benchmark lending rates－are likely to decrease soon, helping to revive credit demand, boost market confidence and stabilize the real estate sector, said Wen from China Minsheng Bank.

With monetary and fiscal policy measures to expand consumption and investment, China’s economy is expected to achieve full-year growth of 4.2 percent year-on-year, expanding by about 5 percent in both the third and fourth quarters, he said.

Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, a Swiss firm, said the Fed may slow the pace of tightening by raising interest rates by 50 basis points at its September meeting and 25 basis points in the next meetings as US inflation may have peaked in July.

“If the Fed’s rate hikes slow, it will be conducive to both China’s real economy and cross-border capital flow stability,” said Shao Yu, chief economist at Orient Securities.

This is because a slowdown in the Fed’s rate hikes can alleviate the recession risks of the US economy and therefore buoy demand for China’s exports, while lessening the depreciation pressure on the renminbi by slowing capital flows to the US, Shao said.

Source: China Daily

Business

MTCC reports staggering 82.9% net profit drop

Published

1 day ago

01/05/2024

Maldives Transport and Contracting Company (MTCC) has reported a staggering 82.9% net profit decline for Q1-2024.

According to MTCC, it earned just MVR 5.2 million in net profit for the review quarter, which came down from MVR 30.8 million in the last quarter of 2023.

The company’s revenue for Q1-2024 stood at MVR 664.4 million, which is a 15.8% drop from MVR 789.2 million generated in the Q4-2023.

Moreover, MTCC reported a whopping 94.5% decline in its Gross Profit for the review quarter, registering MVR 2.5 million in Q1-2024 compared to MVR 44.3 million.

The operating profit for the review quarter stood at MVR 41.8 million, which is a 26% drop from MVR 56.5 million in Q3-2023.

The net asset value per share dropped from MVR 227.95 in Q4-2023 to MVR 226.98 to Q1-2024, while earnings per share saw a notable decline from MVR 3.83 in the preceding quarter to just MVR 0.65 in the review quarter.

Source(s): sun.mv

Business

STO opens showroom in Hulhumale’

Published

1 week ago

24/04/2024

State Trading Organization (STO) has opened a showroom specialized for construction in Hulhumale’.

The showroom was inaugurated by Construction Minister Dr. Abdulla Muthalib during a special ceremony held on Tuesday night.

Speaking at the ceremony, STO’s Managing Director Shimad Ibrahim stressed the role of the company’s former managements and board members in carrying forward the company and therefore extended them gratitude.

Situated at the same location as STO’s Hulhumale’ shop – next to STO’s Smart Store near Hulhuamle’ Hospital – the construction solutions showroom was opened following renovations up to modern standards.

STO reports that all construction-related products sold by the company will be available at the showroom including some of the most renowned brands sold by the company; Makita tools, Nippon paint and concrete from prominent mix designing brands among others.

The state-owned company is prominent in the local construction industry as STO’s constructions solutions is the largest importer and seller of construction-related products in the Maldives.

STO noted that customers can now place orders for construction-related products including Makita tools and Nippon paint via the Hulhumale’ showroom which would eliminate the need to travel to Male’ to make the purchases. Arrangements have been made in the showroom to prepare the colors of Nippon paint ordered by the customers on demand.

Henceforth, they attributed the opening of the new showroom as something which would bring easements to the lives of Hulhumale’ residents and construction industry partners operating in the suburb.

Source(s): sun.mv

Business

Economy thrives, projects speed ahead despite challenges

Published

2 weeks ago

18/04/2024

Before President Dr. Mohamed Muizzu assumed office, the economic condition of the Maldives was significantly deteriorating. Experts attribute the primary reason for the depreciation of the Maldivian currency to the excessive printing of money by the previous administration.

According to statistics from the Maldives Monetary Authority (MMA), more than USD 518.04 million was printed over the last three consecutive years, marking a historic high compared to USD 388.53 million printed over 40 years.

Additionally, upon assuming office, President Muizzu inherited a heavy debt burden. The total debt amounted to over USD 7.71 billion, with a significant portion owed to companies for upcoming parliamentary elections and previously initiated projects, totaling USD 584.88 million.

Despite these challenges, President Muizzu has been proactive in rejuvenating the Maldives’ economic status. Within three months of his tenure, USD 35 million has been deposited into the sovereign development fund. The President estimates that more than USD 100 million will be deposited into the fund by the end of the year.

discontinuation of printing money has been regarded as a pivotal step towards economic progression for the Maldives

President Muizzu’s commitment to revitalizing the Maldivian economy without resorting to the printing of money is indeed a significant pledge. By discontinuing the practice of printing money, the government aims to address economic challenges while ensuring fiscal responsibility and long-term sustainability.

The decision to immediately halt the printing of money upon assuming office underscores President Muizzu’s determination to prioritize sound monetary policy. This move reflects an acknowledgment of the risks associated with excessive money printing, including inflation and currency devaluation, and signals a commitment to addressing these challenges through prudent financial management.

Furthermore, President Muizzu’s plans to boost the country’s prosperity and income by reducing reliance on loans and settling debts owed to both foreign and domestic entities demonstrate a holistic approach to economic revitalization.

attracting a vast pool of investors

The efforts of the present administration to attract a wide range of investors reflect a strategic approach to addressing the significant development needs of the Maldives. By engaging in investment forums both domestically and abroad, the government has been successful in showcasing the diverse investment opportunities available in the country.

The decision to host investment forums in countries like China and the UAE demonstrates a proactive approach to international investment promotion. These forums serve as platforms for highlighting the potential for investment in key sectors such as infrastructure, tourism, and hospitality. By creating awareness about these opportunities, the government aims to attract investors who are interested in contributing to the development of critical projects, including the establishment of bridges, domestic airports, and resorts.

Over 500 projects underway

The continuation of 527 projects, including those that faced interruptions due to non-payment to companies during the government transition, underscores the commitment of President Muizzu’s administration to ensure continuity and progress in ongoing initiatives. Despite the challenges encountered, efforts have been made to address issues such as delayed payments and optimize project expenses to keep important projects on track.

It’s notable that the current year’s budget, initially approved by the prior administration, may not have fully aligned with President Muizzu’s priorities and rules for project implementation. This misalignment may have resulted in some projects not receiving adequate budget allocations or not being included in the budget at all. However, the administration has taken steps to optimize expenses and prioritize projects that align with President Muizzu’s vision for development

Initiatives to enhance economic growth and foster sustainable growth

The International Monetary Fund (IMF) has recognized President Muizzu’s initiatives as some of the strongest implementations seen among world leaders, emphasizing their potential for substantial progression. The IMF applauded the government’s decision not to overdraw the government’s account and expressed its readiness to provide any assistance needed. This endorsement from the IMF underscores the effectiveness of President Muizzu’s economic policies and strategies.

Additionally, the Maldives National Chamber of Commerce and Industries has voiced support for the government’s initiatives, recognizing them as favorable for the Maldivian future as a growing economy. Despite challenges such as a shortage of dollars for small businesses, the Chamber remains optimistic that the government’s decisive actions will lead to economic growth and stability in the value of the dollar.

The government has projected a 5.5 percent economic growth rate for this year, indicating confidence in the trajectory of the economy under President Muizzu’s leadership. Furthermore, President Muizzu revealed a significant reduction in the country’s primary debt balance, from USD 103.61 billion last year to USD 8.68 million in the current year. This reduction in debt, achieved within just four months, demonstrates the government’s commitment to fiscal responsibility and its ability to effectively manage the country’s finances.

Overall, these developments indicate that the government’s economic rejuvenation efforts have been successful, earning the confidence of global financial institutions in the Maldives’ future economic prospects.

Source(s): PsmNews