Inflation a big issue to tackle next year

businesstimes.com.sg :

Singaporeans are by now accustomed to reports of rising prices, but that does little to change the fact that inflation is increasingly becoming one of the key issues the country has to tackle in the new year. Christmas Eve brought more news on the inflation front, with consumer prices rising at their fastest pace in 25 years in November due to higher food and transport costs. Last month's consumer price index (CPI) surged 4.2% compared with a year ago. It was also 0.6% higher than the 3.6% recorded in October, which was itself a 16-year high. November's inflation figure has confirmed that October's CPI was not just a one-off spike. Economists are now bracing themselves for even steeper increases in the CPI, and the 5% is seen as within touching distance.

The latest CPI figure has added more urgency to the need for government action to stem price pressures. The government has sketched out how it is likely to tackle rising prices. At the recent People's Action Party (PAP) annual convention, Prime Minister Lee Hsien Loong said that the government is unlikely to impose controls on food or utility prices in response to rising inflation, but will continue to use other ways to help Singaporeans cope with the cost of living. It is now widely expected that the Monetary Authority of Singapore (MAS) will let the Singapore dollar strengthen further, and a stronger local currency can help counter costlier imports. In terms of fiscal policies, the government has announced that it would hold back some projects, to help cool the building sector. But the consensus is growing that the government needs to go beyond monetary and fiscal measures.

One proposal is for the government to restore some of the CPF employer contribution cuts as a way to cool labour demand, which in turn will moderate growth and demand, and help ease inflationary pressures. Other suggestions include more utility bill rebates and lower conservancy charges for the lower-income families to offset higher food costs. Hopefully, as many views as possible will be heard and debated. Cost pressures look set to become a key theme in policy making in the coming few months, and could well define next year's Budget too.

- This just about sums up the tone for next year, 2008. We close 2007 with public acknowledgement of record-setting inflation rates, even in official CPI figures. Let's not forget that Singapore's year-on-year M3 money supply growth has running at or around the 20% level in each and every month in 2007. Official CPI figures hitting 5% or even higher would be quite a phenomenon. M3 figures for that time period could be even more interesting.

Fight the good fight against inflation!

Have a Happy New Year 2008.

Suez Canal to raise fees in 2008

channelnewsasia.com :

Transit fees for ships using Egypt's Suez Canal will increase in 2008 by an average of 7.1%, the canal authority said on Sunday [20 Dec 2007]. Fees will rise by 5.7% for container ships, by 7.3% for oil tankers and by 10.5% for natural gas ships, authority chief Ahmed Ali Fadel told reporters in the canal city of Ismailiya.

The authority, which has run the canal since its nationalisation in 1956, last raised transit fees in April 2007. The Suez Canal, which opened in 1869, is Egypt's third largest source of revenue, after tourism and remittances from expatriate workers.

- Interesting place for inflation to pop up.

(2007-12-31 23:29:24 SGT) [Biz] Permalink

Shell plans to outsource 3600 jobs

peakoil.com -> telegraph.co.uk, royaldutchshellplc.com :

Royal Dutch Shell is to shed thousands of jobs as Europe's largest oil company joins rival BP in trying to cut costs and simplify its structure. Shell is looking to agree one of the largest ever outsourcing deals in the next couple of months, and plans to reorganise other departments, including finance operations.

The company has said previously that it wants to cut costs, but the scale of some of the proposed changes has surprised insiders and led to the leaking of information to an anti-Shell website by disillusioned staff. The biggest change will be in the information technology division, where around 3,600 staff may be affected by a plan to farm out operations to three companies. Shell employs about 108,000 people.

News that the IT plan is likely to be far bigger than first envisaged has sparked wider concern about job cuts. According to another leak, to the Dow Jones news agency, Shell's financial director Peter Voser has told staff that he wants a "leaner and meaner" department in 2008, a sign that he intends to strip out layers of management. In an interview with Dutch newspaper de Volkskrant earlier this month, Shell's chief executive, Jeroen Van der Veer, said that production costs had risen 65% in two years.

UK beer prices may rise 60% in 2008 : Financial Times

bloomberg.com :

The price of a pint of beer may increase 60% in the U.K. in 2008 after the wet summer led to a poor cereal crop and costs rose, the Financial Times reported. Brewers are being forced to pass costs onto drinkers after the price of hops almost doubled, while barley increased by 40% and aluminum and glass package prices went up in recent months, the newspaper said, citing Bruce Davidson, an analyst at Blue Oar Securities.

- And so the saying goes, or so I am told : "woe betide him who comes between a man and his beer". The enemy is called inflation, lads. Inflation is coming between you and your beer.

(2007-12-31 23:17:42 SGT) [Biz] Permalink

Japan inflation at fastest pace in more than 9 years

bloomberg.com :

Japan's inflation rose at the fastest pace in more than nine years in November and industrial production and household spending declined, signaling rising oil costs may derail the economy's longest postwar expansion. Core consumer prices, which exclude fresh food, climbed 0.4% from a year earlier, the statistics bureau said today [28 Dec 2007] in Tokyo.

Factory output slid 1.6% from a month earlier. Wages fell and employment prospects worsened as job seekers outnumbered vacancies for the first time in two years, the Labor Ministry said. "Japan's economy is entering into a new phase of accelerating inflation and slowing growth," said Susumu Kato, chief economist at Calyon Securities in Tokyo. "The bank will probably keep rates on hold in the next two to three quarters."

Food and oil costs are fanning inflation across Asia. South Korea's consumer prices rose to a three-year high in November and China's inflation was the quickest in 11 years. Singapore's consumer prices rose the most in 25 years.

- So, Japan is going into "accelerating inflation and slowing growth" - the classic definition of stagflation. The fires of inflation are starting to rage across Asia. 2008 will be very interesting.

Netscape to be shut down after failing to win users

bloomberg.com :

Netscape, the Web browser once used in 80% of all Internet sessions, will be shut down by AOL after failing to regain market share from Microsoft's Internet Explorer. Netscape users should switch to Mozilla Foundation's Firefox browser, Netscape director Tom Drapeau wrote on his blog. America Online Inc. paid $9.8 billion in 1999 for Netscape, which by then had been crippled by Microsoft. The decision ends AOL's almost nine-year effort to revive Netscape, the browser that helped popularize Internet use by making it easier for millions of consumers to log on.

AOL bought Netscape to broaden its revenue sources as its dial-up Web-access service declined. America Online bought Time Warner for $124 billion in 2001. It now forms Time Warner's AOL Web unit. In July 2003, AOL helped finance the creation of not-for-profit Mozilla with $2 million and helped at the development of Firefox by providing technical support, employees, equipment and intellectual property such as codes. AOL fired most of its Netscape development employees in 2003. "Recently, support for the Netscape browser has been limited to a handful of engineers tasked with creating a skinned version of Firefox with a few extensions," Drapeau said.

blog.wired.com :

The browser that started it all is going the way of the dodo. Tom Drapeau, AOL's director of the Netscape brand, announced in a blog post Friday that AOL will cease development on all Netscape web browsers on February 1, 2008. The company will continue to support the current version of the browser, Netscape 9, by releasing patches or security fixes until that date. After February 1, all development will stop. Drapeau recommends that anyone running a Netscape-branded browser make the switch to Mozilla Firefox, the open-source browser upon which the last few versions of Netscape have been based.

(2007-12-29 21:08:36 SGT) [Tech] Permalink

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