On the back of mounting concerns that developed economies will scale back liquidity pumping, Indonesia has joined other emerging and developing economies in addressing an outflow of capital. For the first time since 2011, the Bank of Indonesia last month raised its reference interest rate by 25 basis percentage points to 6% in a move aimed at supporting the rupiah and easing inflation expectations. The HSBC purchasing managers‘ index (PMI) signaled continuous improvement in Indonesia‘s operating conditions during June for the fifth month running, though at slower pace; the index posted 51.0 in June, down from 51.6 in May.
The average reading of the index in 2Q2013 is 51.4, which is better than the 50.5 of 1Q2013. The Statistics Bureau of Taiwan estimated an increase in private investment to touch a record NT$2.3 trillion this year although a global economic slowdown is hurting exports. The government of Taiwan has taken steps aimed at supporting investment and export via simplifying procedures, cutting taxes, striking trade agreements with the United States and Asian countries as well as relaxing immigration rules.
For the second month running, Taiwan‘s manufacturing PMI experienced a drop in June from 49.5 to 47.1 indicating lower new business starts and less output. The Philippines’ exports plunged by 12.8% in April, while the unemployment rate increased to 7.5% from February–April. Inflation, however, held at 2.6%, its lowest in 13 months, which gives the monetary policy scope to spur growth. Due to lower shipping of electronic goods by manufacturers in May, Singapore’s exports slid 4.6% from a year earlier, after hitting a 1% slump in April. Electronics shipments shrank 13.2% from last year. Operating conditions in Hong Kong deteriorated in June at their fastest pace since November 2011 as indicated by the PMI, which slid from 49.8 in May to 48.7 in June. The survey showed sharp declines in output and new business starts, as well as the steepest plunge in employment for 21 months.