Saturday June 26, 2010
Compiled by Izwan Idris
US keeps G20 focus on growth, Europe resists
The US said on Thursday world leaders must work to keep economic growth on track but Europe dug in its heels ahead of a G20 summit, insisting that now was the time to work on cutting costs.
With the global economy tentatively emerging from its worst slump in decades, the Group of 20 nations head for their weekend summit in Toronto struggling to agree on the next steps but divided over whether Europe’s new budget austerity plans could torpedo the fragile recovery. G20 leaders must also forge a consensus on how to harmonise financial regulatory reforms, but still face differences on the breadth and timing of measures they hope will prevent another meltdown of the banking sector.
President Barack Obama, pushing Washington’s pro-growth line, said “surplus countries” – often code for Germany and China – must find ways to stimulate growth while acknowledging that countries including the US with medium- and long-term deficit problems would have to address them. — Reuters
Japan CPI shows deflation tough to beat
Japan’s narrowest measure of consumer inflation matched a record annual fall in May in a sign of still weak demand, showing the burden deflation is placing on the world’s second-biggest economy.
The data suggests slow wage growth and a large gap between supply and demand will slow an exit from deflation, boding ill for the Bank of Japan’s (BoJ) forecast of a slight rise in core consumer prices in the fiscal year starting next April.
The Democratic Party-led government has also vowed to beat deflation next fiscal year, keeping pressure on the BoJ to maintain an easy monetary policy, while the party aims to win an upper house election on July 11 to maintain smooth policymaking.
The core consumer price index, which includes oil products but excludes volatile prices of fresh fruit, vegetables and seafood, fell 1.2% in the year to May, the 15th straight month of annual declines, the Internal Affairs and Communications Ministry said yesterday. — Reuters