According to media reports from China, the government has lifted its estimate for economic growth this year to 9.5%, from the 9.1% recorded in 2009.
TV news programs said this was now the official forecast.
Usually the government forecast for much of the year is the official 8% target rate and hedge its commentary around various movements in the economy until late in the year when it provides an updated and fairly accurate figure. That’s usually after the end of the third quarter.
Third quarter GDP figures are due out in the next 10 days.
China’s economy rose at an annual rate of 11.9% in the first quarter and slowed to a 10.3% rate in the second quarter of this year.
The news report follows the release of the better than expected surveys of the country’s manufacturing sector last week.
They were part of what was a mixed flow of economic data from Asia, all of which will have been taken into account by the RBA in today’s rate decision.
Besides the recovery in Chinese manufacturing, Japanese deflation and unemployment are a little better, but output is weak; inflation is rising in South Korea and in Australia manufacturing has contracted for the first time in 2010.
The Thai and Malaysian currencies (The Baht and the Ringgit) hit 13 year highs last week (that’s the highest since the Asian crisis in 1997-98).
Taiwan lifted a key interest rate last week to 1.5%, the second rise this year, but South Korean industrial production surprisingly fell.
And the Japanese government of Prime Minister Naoto Kan is set to reveal a new 58-billion-dollar stimulus package this week that was floated 10 days ago.
China’s official purchasing managers’ index (PMI) rose to 53.8 in September from 51.7 in August, the China Federation of Logistics and Purchasing (CFLP) said on Friday.
The federation compiles the index on behalf of the National Bureau of Statistics.
The index hit a record low of 38.8 in November 2008 and was last below 50 in February 2009.
The survey add to one from HSBC last Wednesday that also showed an acceleration in activity in the sector, rising to 52.9 from 51.9 and under 50 midyear.
In Friday’s survey the output index rose to 56.4 from 53.1 in August, the measure of new orders gained to 56.3 from 53.1 and an export-order index climbed to 52.8 from 52.2. An input price index rose to 65.3 from 60.5, the biggest jump among all sub-indexes.
The Chinese Government also continued to tighten its grip on the property sector last week by strengthening down-payment rules for first homes, suspending third-home loans and pledging to quicken a trial of a property tax.
China’s Shanghai Composite Index rose 11% in the September quarter, but was still down for the year. Chinese markets were closed Friday for a national holiday, as was much of Asia.
In Australia, it was a different story with manufacturing activity contracting in September for the first time this year.
Weak domestic demand and the stronger Australian dollar helped push the Australian Industry Group/PriceWaterhouseCoopers performance of manufacturing index (PMI) down 4.4 points in September to 47.3, and under the 50 level that marks the threshold between contraction and expansion.
Survey respondents cited the strong Australian dollar, higher cost of raw materials, weaker demand and political uncertainty in Australia as the major negative influences. The weak result was largely driven by deepening declines in activity in food and beverages and fabricated metals sectors
The Australian dollar climbed over 8% against the greenback last month to hit a series of multi-year highs.
Japan’s deflation eased a touch and unemployed fell last month.
Consumer prices excluding fresh food were off 1% in August from a year earlier after falling 1.1% in July. The jobless rate eased to 5.1% from 5.2 percent, thanks to a fall in the number of people looking for work, which isn’t a sign of confidence in the future by the unemployed.
South Korean consumer price inflation accelerated last month to an annual rate of 3.6%, from 2.6% in the year to August, a sizeable jump.
The Bank of Korea is forecasting that inflation will remain above 3% in the 4th quarter of this year, which will increase pressure on the central bank for another rise in interest rates.,
The bank left its key market rate unchanged at 2.25% last month after increasing it 0.25% in July to 2.25%.
The economy grew at an annual 7.6% in the six months to June, but this is forecast to fall to around 4.5% to 5% in the second half of this year.
The country’s foreign reserves hit a record last month of more than $US289 billion, up $US4.4 billion on August.
