The Chinese year of the Ox doesn’t seem to be bringing in a bullish year for Asian economies. As a precursor to the drastic slowdown in export dependant Asia, Singapore released growth figures for its fourth quarter in 2008. The service based economy, contracted for a third consecutive quarter leading Singapore deeper into recession, recording its slowest growth in seven years. Singapore is Asia’s third economy to fall into recession after Japan and Hong Kong.

Singapore’s economy grew by 1.5 percent in 2008, less than a fifth of its 7.7 percent growth in 2007 and slower than the 2.5 percent the government had predicted two months ago.

“If we are correct, 2009 will mark the most severe recession in Singapore’s history,” Citigroup Inc. analyst Kit Wei Zheng, who expects the economy to contract 2.8 percent this year told the AP. (more…)

In order to buffer themselves against the downturn and subsequent slump in exports, emerging Asia’s governments are taking some serious measures.

While the Indian government announced a second stimulus package within a month, lowering policy interest rates, easing overseas borrowing norms and increasing the foreign investment limit in corporate bonds to US$15 billion, other South East Asian nations also implemented changes.

Singapore, one of Asia’s worst performing economies will announce changes to boost the economy during their annual budget session, which has been pre-poned to January instead of February this year; China, which is feared to perform its worst in two decades is expected to announce several more measures to boost their economy soon too. South Korean and Malaysian leaders have also expressed interest in taking steps to stimulate the economy this month. (more…)

While lower oil prices signal a short term gain for consumers and businesses, it also means lower spending on renewable energy by businesses and a drop in income for countries that are increasing their share of renewable energy. Crude prices which soared this summer, have sizzled down to US$40 a barrel and are expected to tumble further.  Sinking oil prices also reduce the political will to push ahead with costly renewable energy projects and reduce the urgency to prioritize energy policy debates and incentives on topics ranging from auto efficiency to offshore drilling. Before renewable energy takes a backseat, and the world clamors after black gold again, 2point6billion takes a look at the various forms of renewable energy.

Renewable energy has a three fold role in emerging Asia - it helps nations develop while protecting the economy, it brings electricity to rural areas where natural resources used for renewable energy are abundant and fossil fuels can be difficult and expensive to procure and it provides a livelihood by creating rural businesses.

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American auto sales plunged 37 percent in November, the worst in 26 years. European new-passenger-car sales slumped 26 percent in November and now its Asia’s turn. While auto sales have crashed in most Asian countries Japan has taken the hardest hit.

Optimistic forecasts say Japan’s car sales next year could fall to the lowest in 31 years. Sales of trucks, buses, cars and mini cars, may fall 4.9 percent to 4.86 million vehicles in 2009 from estimated 5.11 million in 2008, the Japan Automobile Manufacturers Association told Bloomberg. The tally would be the lowest since 1978 when automakers sold 4.68 million units.

Toyota, Japan’s top automaker that makes the Camry sedan and Prius hybrid, has already slashed its profit forecast for the fiscal year through March to US$5.9 billion, or about a third of its previous year’s earnings. Expectations are rife another downward revision is coming. Honda Japan’s second-largest automaker, cut its annual profit outlook 62 percent.

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Come the holiday season and the Asian tourism industry is sure to be thrice hit, once with reduced international travelers dampened by the financial crisis, twice by political instability in prime tourist locations such as Thailand and India and thrice by weakening local currencies. However Asian hospitality personnel are not too worried, while they know tourism arrivals will soften they also seem assured that Asian’s will travel, if not internationally at least regionally.

Additionally, budget hotels and airlines, such as Tiger Airways, AirAsia Bhd. and Jetstar buoyed by value for money offers are expecting to see increased profits during he holiday season. Top Asian tourist destinations affected by unrest India and Thailand, both have announced lowered air fares and room rates to lure more tourists during this peak season.

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Asian governments have used every trick in the book to push consumers to buy more goods, to keep the economy healthy and kicking. With the industry faltering and exports slowing to seven year lows, all Asian governments have taken some precautionary measures - reduced interest rates and pumped money into the economy. Nonetheless, many have gone a step further in promoting consumer spending. Recession hit Japan is distributing cash payments to households, China is giving tax breaks on purchases of cellphones and washing machines and India which has already reduced fuel prices is handing out raises to four million public servants.

However, these governments have failed to overlook a problem culturally intrinsic to Asia. Asians are the world’s most-dedicated savers. Known to diligently pay back credit card debt at the end of every month, and only recently wager on large loans, Asian’s are savers. Their thriftiness having being reinforced by the Asian financial crisis, its getting increasingly difficult for governments to persuade consumers to loosen their purse strings when times are weary. As a result, Asian governments are themselves spending more to rejuvenate industry and jump start the economy.

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Thailand’s stock market rose almost three percent closing at 437.06, up 12.27 points, in trade worth 19.48 billion baht (US$560 million) on news that the political deadlock plaguing the country since the past six months was resolved.

As England born Abhisit Vejjajiva head of he opposition Democrat Party was declared the winner in a parliamentary vote, business leaders throughout the country welcomed the decision. The challenge they now feel is for the new political party to form a strong team and improve the economy while keeping society and politics in harmony. Agriculture, small businesses, tourism and labor are the four sectors that need the most government support.

“The faster [the Democrats] are able to restore confidence, the more public support and trust there will be in their team. I want to see the new government pass the 100-billion-baht stimulus package as soon as possible,” Mr Santi Vilassakdanont, the chairman of the Federation of Thai Industries (FTI) told the Bangkok Post.

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Its hard to find positive news to start this week off with, so lets try to find the silver lining around the cloud of gloom.  The International Air Transport Association (IATA) based in Geneva announced last week that although the airline industry will be loosing US$5 billion in 2008, lowered oil prices and passenger traffic during the second half of 2008, will mean airlines will cut fares in 2009 by about 5 percent.

The IATA announced that Asia-Pacific airlines will be the most severely hit  loosing approximately US$1 billion in 2009 predominantly due to a drop in cargo. Asia-pacific carriers currently account for 45 percent of global cargo market .

Describing the present industry crisis as the toughest revenue environment in 50 years Giovanni Bisignani, director-general of the IATA told the Times of India “Asia Pacific losses will more than double to $1.1 billion, the biggest ever…. Japan is in recession. China is suffering from a major drop in export market. India’s carriers, already suffering high taxes and insufficient infrastructure, can expect a drop in demand from last month’s tragic events.”

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Even as the Asian Development bank dims its Asia GDP growth forecast for 2009, from 7.2 percent to 5.8 percent, Central bankers from East Asia - China, Japan and South Korea have decided to meet this weekend to discuss regional economic and financial issues.  The meetings will be aimed at enhancing dialogue among the financial policymakers who feel the region needs to work cohesively to withstand impacts of the crisis. (more…)

A shrinking western demand, rising inflation and a  scarcity of trade finance have resulted in a significant slump in Asian exports, putting a dampener on the festive season. While governments have tried various measures to stimulate their economies including generous stimulus  packages, reducing interest rates by up to 1 percent and increasing inter-regional trade, exports have continued to decline.

Exports are the growth engine of Asia and contribute more than 46 percent of gross domestic product for the region’s main economies outside Japan. The 5-6 percent drop in demand from richer western nations has meant a significant drop in goods and services exported from Asia. As a result, not only are many Asian economies experiencing the lowest exports since the dot com bubble seven years ago, but their currencies have also nosedived. Bloomberg said eight of the region’s 10 most-traded currencies excluding the yen dropped this week as investors became net sellers of shares from South Korea, Thailand and the Philippines. 2point6billion, rounds up the fall in exports and currencies around Asia.

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