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Southeast Asia Digital Economy Slows as Consumers Curb Spending – BNN Bloomberg

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(Bloomberg) — Growth in Southeast Asia’s internet economy is slowing after years of expansion, showing that even emerging digital markets aren’t immune to economic headwinds.

Online spending in the region will rise about 20% this year to $200 billion, research from Google, Temasek Holdings Pte and Bain & Co. showed, slowing from 38% a year earlier. The region’s internet economy is set to reach $330 billion by 2025, according to the report, down from a previous forecast of $363 billion.

This is the first time estimates have been revised downward in the companies’ annual report, which covers Singapore, Indonesia, Malaysia, Thailand, Vietnam, and the Philippines. Even as the region’s consumers are adopting mobile and online services at a rapid clip, they are curbing spending amid accelerating inflation and rising interest rates — just like their peers globally.

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“After years of acceleration, digital adoption growth is normalising,” the companies said in a release. “The majority of digital players are now shifting priorities from new customer acquisition to deeper engagement with existing customers to increase usage and value.”

Southeast Asia, home to Alibaba Group Holding Ltd.’s Lazada and Sea Ltd.’s Shopee, will see a 16% increase in e-commerce gross merchandise value this year, slowing sharply from pandemic highs as consumers become more cautious. Online shopping is now forecast to hit $211 billion in 2025 versus a previous $234 billion prediction, making up 64% of the region’s total estimated digital GMV, the research showed.

E-commerce, financial services and travel are among leading sectors driving the region’s digital growth, the report showed. Southeast Asia is adding about 20 million new digital consumers in 2022.

The number of deals involving tech companies in the region remained relatively steady at about 1,200 in the first half of this year compared with a year-earlier period, according to the report. Early-stage investments are increasing, while later-stage deals are getting hit by dimmer public listing prospects in the capital markets. Southeast Asia venture capital funds held about $15 billion in “dry powder” at the end of 2021, down from $16 billion a year earlier.

“Macroeconomic headwinds are here,” Stephanie Davis, vice president at Google Southeast Asia, said in an interview with Bloomberg TV’s Haslinda Amin and Rishaad Salamat. “We do expect some conservancy in the later half of this year and next year. In fact, about three quarters of venture capital firms in the region expect there to be declines in valuation.”

Indonesia remains the region’s largest digital economy where online spending is predicted to rise to $130 billion by 2025. Vietnam is expected to grow at the fastest rate among the six countries tracked by the study, more than doubling in online GMV over the next three years.

–With assistance from Haslinda Amin and Rishaad Salamat.

(Updates with comment from executive in eighth paragraph)

©2022 Bloomberg L.P.

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No, Britain’s Economy Isn’t On The Rocks.

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How bad is Britain’s economy?

It depends on what you read.

For instance, the Atlantic magazine headlined a recent feature “How the U.K. Became One of the Poorest Countries in Western Europe.”

The features continues with the following: “The U.K. is now an object lesson for other countries dealing with a dark triad of deindustrialization, degrowth, and denigration of foreigners.”

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In other words, the Atlantic has some pretty brutal thoughts on the U.K.’s economy.

Unfortunately, none of that reflects the reality I have lived and the economic data.

Let’s start with some basics.

UK Post-pandemic Growth Shines

First up is inflation-adjusted GDP since the beginning of 2021. In that case, the UK leads the pack of the three largest European economies. It grew 7.4% last year following by 3.6% this year, according to data from the International Monetary Fund.

Contrast that with France which grew 6.8% last year and 2.5% this year, then Germany which limped along at 2.6% in 2021 and 1.5% so far this year.

It shouldn’t take a PhD in mathematics to see that the UK is growing faster than the others over that period. Its not a huge difference in the case of France, but still its not like Britain is a basket case.

Fewer Jobless

UK unemployment is also far lower than either France or Germany. Britain’s jobless rate is a mere 3.6%, according to TradingEconomics. That compares with 5.5% and 7.3% for Germany and France respectively.

Some observers say the UK’s rate is so low because many people have stopped looking for work. Its a fair point, but only at the margin. In other words, its a relatively small issue. People who aren’t looking for work can hardly be unemployed. Second, if the UK rate was adjusted for the lower participation its hard to see the jobless figures jump to the current levels in France or Germany.

Modest Debt

Despite claims to the contrary that cutting taxes would send an already-indebted country into economic oblivion, the U.K. could probably afford to borrow bit more cash.

That’s because there’s massive hole in the assertion that Britain is in hock up to its eyeballs, its plainly wrong, especially compared to other rich countries.

The UK’s debt-to-GDP ratio is around 97%, again according to TradingEconomics. However, for France the figure is 113%, and the U.S. is 137%. Germany stands out at 69%.

In other words, the U.S. (generally considered to be a strong economy,) and France (a bedrock economy of the European Union) are much more in debt than Britain and yet observers seem excited to bash the U.K. like it was going out of fashion.

Germany does have a better debt ratio, but it is also a country that spends proportionately far less on defense than the other comparison countries. That’s something that the world has scrutinized closely since the invasion of Ukraine on February 24.

Illegal Migrants

However, perhaps the trump card in demonstrating the strength of the UK’s economy is the wave of illegal migration into the country.

Wave may understate the matter.

Its more of a tsunami.

This year so far more than 40,000 people have made the life-threatening journey across the channel from France to England. That’s up from less than 30,000 last year, and under 10,000 in 2020. Many of the people who make that journey get granted refugee status.

When considering this information its important to understand that migrants are leaving a democratic country will at top notch record on human rights and with a strong economy. Its also worth remembering that France has better weather than the U.K., and finer food.

It’s the Economy, Stupid

So why would so many people risk their lives crossing by far the world’s busiest shipping lane at night in a rubber dinghy to get to Britain? People can and do die on that trip with banal regularity.

Maybe they really do like the abundant grey skies, and drizzle that the country has to offer. Perhaps they really like British food in the way a native enjoys them.

But what about this: There’s a chance that the U.K.’s market driven economy is attractive to people in a similar way that America is attractive to migrants of all types.

On top of that, the Atlantic is wrong about Britons not liking foreigners. In fact, the U.K. population embraces people from all over the world.

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Charting the Global Economy: OECD Raises Inflation Forecast

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(Bloomberg) — Central banks around the world must be steadfast in their inflation fight even though economies will suffer as a result, the OECD said this week.

The organization boosted its 2023 inflation estimates and said it expects price increases the following year will remain above the targets set by many global central banks. While economies will slow because of tighter monetary policies, the OECD didn’t forecast a recession.

Though a survey of US manufacturers showed a fifth month of shrinking activity, another report indicated a healthy increase in business investment. A survey of the euro area businesses indicated that any downturn may not be severe as initially expected.

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Meantime, the Bank of China eased reserve requirements for banks to help bolster the world’s second-largest economy.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

World

The world’s central banks must keep raising interest rates to fight pervasive inflation, even as the global economy sinks into a significant slowdown, according to the OECD. The organization raised inflation projections for next year and said that while the global economy will suffer a “significant growth slowdown,” it’s not forecasting a recession.

This week saw more major rate hikes across the world, with 75 basis-point hikes in Sweden, New Zealand and South Africa and full percentage-point moves in Pakistan and Nigeria. Turkey went the opposite way, cutting rates by 150 basis points.

US

Business activity contracted for a fifth month in November as demand faltered, while inflationary pressures continued to slowly ease. The S&P Global flash composite purchasing managers’ index slid to the second-lowest level since the immediate aftermath of the pandemic.

Orders placed with US factories for business equipment rebounded in October, suggesting capital spending plans are holding up in the face of higher borrowing costs and broader economic uncertainty. Core capital goods shipments jumped the most since the start of the year, suggesting a solid start to fourth-quarter gross domestic product.

Europe

Euro-area businesses see tentative signs that the region’s economic slump may be easing as record inflation cools and expectations for future production improve. A gauge measuring activity in manufacturing and services unexpectedly rose in November, according to S&P Global.

Sweden’s home-price decline accelerated in October, as the Nordic country gripped by the most severe housing slump in three decades shows what may lie ahead for many other developed economies.

Asia

For the second time this year, China’s central bank cut the amount of cash lenders must hold in reserve, ramping up support for an economy racked by surging Covid cases and a continued property downturn. The People’s Bank of China reduced the reserve requirement ratio for most banks by 25 basis points.

Signs are growing in China that local government debt burdens are becoming unsustainable. China’s 31 provincial governments have a stockpile of outstanding bonds that’s close to the Ministry of Finance’s risk threshold of 120% of income. A major cause of the financial squeeze is the property crisis.

Australia has spent big to attract swathes of Indian tourists to its shores, signed a free-trade deal with post-Brexit Britain and uncovered new Middle East markets during its 30-month trade rift with China. Still, outside iron ore and other key commodities, there’s been substantial pain for exporters.

Emerging Markets

Chile is set to lead the world into a steep interest rate-cutting cycle next year as inflation slows and its economy goes from boom to bust, according to swap markets. Traders are forecasting more than 5 percentage points in cuts in the next 12 months after a surprise inflation print last month and as the economy teeters on the edge of recession.

Shipments of boats, vehicles and computer parts are leading Mexico’s export boom, showing growing US demand for industrial products from its southern neighbor. The export of boats produced in Mexico increased 266% in September compared to a year ago, the fastest-growing item among Mexican exports worth more than $100 million.

–With assistance from Maya Averbuch, Sebastian Boyd, Valentina Fuentes, Sybilla Gross, William Horobin, John Liu, Yujing Liu, Swati Pandey, Reade Pickert, Jana Randow, Niclas Rolander, Zoe Schneeweiss and Ben Westcott.

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Canada’s Best Credit Cards for 2023

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Canada’s Best Credit Cards for 2023

Choosing the best credit card in Canada can get confusing. Not only are there so many options, but everyone has different goals, desires, and credit histories – all of which come into play when choosing a credit card. For example, parents with a large family would likely benefit from a credit card that has great cash-back rewards on groceries and gas while a digital nomad might enjoy points and comprehensive insurance from a card that rewards travel purchases.

 

However, rewards aren’t the only thing to consider. You should also take into account the annual percentage rate (APR), annual fee, and welcome bonuses. To help you decide which is Canada’s best credit card for 2023, we’ve broken them down by category and included all the important details.

Best Credit Cards in Canada 2023

No matter your financial situation or goals, there is a credit card out there for you. Here’s a breakdown of Canada’s best credit cards in 2023:

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Best Cash Back Credit Card

CIBC Dividend Visa Infinite Card

 

  • Welcome bonus: $200
  • Annual fee: $120 after the first year
  • Regular APR: 20.99% – 24.99% (variable)

 

This card gives you 10% cash back on $2,500 in purchases over the first four billing cycles. Additionally, you can earn 4% cash back on groceries and gas, 2% cash back on dining, transportation, and recurring bills, and 1% cash back on all other purchases.

 

Best Travel Credit Card

American Express Cobalt

 

  • Welcome bonus: 2,500 Membership Rewards points
  • Annual fee: $155.88 ($12.99 per month)
  • Regular APR: 20.99%

 

You can earn 2 American Express Membership Rewards per dollar spent on travel or gas, and 3 points per dollar on travel bookings made through the Amex Travel Portal. This card also comes with travel insurance coverage and a $100 USD hotel credit.

 

Best Business Credit Card

CIBC Aeroplan Visa Business Plus Card

 

  • Welcome bonus: 60,000 Aeroplan Points
  • Annual fee: $120 (rebated in the first year)
  • Regular APR: 19.99%

 

This is the best credit card in Canada for anyone that travels for business. This card offers annual earnings of $456.68 when you book Air Canada and $430.63 in value when you book other any travel, including non-Air Canada flights, cruise lines, rental car companies, and tour companies. You can also benefit from a Buddy Pass to anywhere Air Canada flies in North America, including Hawaii and Mexico.

 

Best Credit Card for Bad Credit

KOHO Prepaid Mastercard

 

  • Welcome bonus: None
  • Annual fee: None
  • Regular APR: None

 

This card is almost a credit/debit card hybrid, and an excellent option for anyone with bad or no credit. The card is loaded with money from your bank account or a direct deposit paycheque. It can be used as a debit card for free, or you can request to open a line of credit to work on building or repairing your credit. If you choose to open a line of credit, there is a $10 per month fee.

Final Thoughts

These are only a few of the best credit cards in Canada for 2023. Give them a try next year and see if your choice helps improve your financial situation!

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