Category: Economy

South Korea is set to enhance its allure for foreign shoppers by doubling tax refund benefits starting in January. Finance Minister Choo Kyung-ho announced plans to raise the maximum limit for tax refunds on domestic purchases made by foreign tourists. Currently limited to 500,000 won ($370) per local purchase and 2.5 million won in total, the new policy aims to boost consumer spending amid a growing tourist influx.

Under the proposed changes, the maximum refundable amount will be doubled, allowing foreign tourists to claim up to one million won (S$1,000) per local purchase and five million won in total upon leaving the country. The move is not only geared towards enhancing the shopping experience for visitors but is also seen as a strategic move to support South Korea’s small businesses.

The plan presents an opportunity for local businesses to benefit from increased consumer spending. As South Korea positions itself as an attractive shopping destination, the move aligns to stimulate economic growth through tourism and retail.

Philippine Airlines (PAL) and Singapore Airlines (SIA) have signed a new codeshare partnership agreement, which will allow the airlines to enhance flight options for their customers travelling between the Philippines and Singapore, and other domestic and international destinations via their hubs. The agreement will start on SIA’s and PAL’s flights between Singapore and Manila by the fourth quarter of 2023, subject to regulatory approvals, said the airlines in a joint statement on November 15.

SIA will also codeshare on PAL’s flights from Manila to 27 destinations within the Philippines, while PAL will codeshare on SIA’s flights to six destinations in Europe – Copenhagen, Frankfurt, Milan, Paris, Rome, and Zurich. These European codeshare sectors will be rolled out progressively across PAL and SIA sales channels and travel agents over the coming weeks.

Both airlines will also explore an expansion of the codeshare agreement to include SIA’s flights to additional points in Europe, as well as destinations in Australia, India, New Zealand, and South Africa.

Codesharing agreements enable airlines to sell seats on each other’s flights and split some of the revenue, while also giving passengers more travel options.

SIA already has a partnership with Malaysia Airlines and is working on similar agreements with other carriers such as Garuda Indonesia, Thai Airways International and Vietnam Airlines to broaden its reach beyond the city-state’s population of about six million people. It is also set to take a 25.1% stake in the enlarged Air India once the flag carrier gets formal approval to merge with Vistara.

Central bank digital currencies (CBDC) have the potential to replace cash, but adoption could take time, said Kristalina Georgieva, Managing Director of the International Monetary Fund at the Singapore FinTech Festival on November 15.

CBDCs can replace cash which is costly to distribute in island economies, offer resilience in more advanced economies, and improve financial inclusion where few hold bank accounts, said the IMF chief, urging the countries to make a more proactive push to develop these currencies.

In her speech in Singapore, Georgieva said that 11 countries, including a number in the Caribbean, and Nigeria, have already launched CBDCs. Around 120 other countries are exploring them, although progress and approaches differ widely and a few have even abandoned the idea altogether.

Georgieva made her remarks as the IMF published the first instalment of a “virtual handbook” on CBDCs, which has been designed to help countries with the design and set-up process and ensure that the new technologies are globally interoperable.

CBDCs are the digital form of a country’s fiat currency, which are regulated by its central bank. These currencies are powered by blockchain technology, allowing central banks to channel government payments directly to households.

The Arab Coordination Group (ACG) plans to allocate up to $50 billion to help build resilient infrastructure and inclusive societies in the African continent, said the Islamic Development Bank President, Dr. Muhammad Al Jasser at the Saudi-Arab-African Economic Conference held in Riyadh, Saudi Arabia on November 10.

Many countries in Africa are particularly vulnerable to climate change, making strengthening climate resilience and adaptation an urgent priority. The ACG financing will support initiatives in areas such as energy security and energy transition; regional integration and connectivity; trade finance and facilitation; gender and youth initiatives; enhanced support for fragile states; enhanced development effectiveness; private sector financing; food security and poverty and unemployment.

The group has cumulatively invested over $220 billion in the region to date.

A strategic alliance, the ACG provides a coordinated response to development finance. Its current members are the Abu Dhabi Fund for Development, the Arab Bank for Economic Development in Africa, the Arab Fund for Economic and Social Development, the Arab Gulf Programme for Development, the Arab Monetary Fund, the Islamic Development Bank, the Kuwait Fund for Arab Economic Development, the OPEC Fund for International Development, the Qatar Fund for Development and the Saudi Fund for Development.

The Seoul office market is experiencing a remarkable occupancy rate of over 98%, coupled with a 15% surge in rents since 2022, in stark contrast to declining demand in other global hubs like London and New York, according to data from CBRE Group.

The thriving market in South Korea can be attributed to a unique combination of factors including supply and demand dynamics, cultural preferences, and economic resilience. Seoul, the capital city, boasts a mere 1.7% vacancy rate in the third quarter, a striking difference from the Asia-wide average of 19%.

Since 2021, Seoul has grappled with a shortage of office spaces, with only half of the historical supply available, notes CBRE’s head of research for Korea. The scarcity is anticipated to persist until 2025, when new projects currently under construction are slated to come online, projecting a year-on-year rental growth of approximately 15% in 2023.

The robustness of the Korean market isn’t solely attributed to demand and working culture. Government restrictions on redevelopment and construction disruptions due to the pandemic have led to a general shortage of office space since 2021. The steady growth of the Korean economy has further strengthened both international and domestic investment.

Offices have been in short supply in Seoul since 2021, with just half of what has historically been available, according to CBRE head of research for Korea. The researcher expects the shortage will last until 2025, when new projects now under construction will come online, and rents to grow year on year by about 15% in 2023.

The Korean market’s strength is not solely down to demand and working culture. There has been a general shortage of office space since 2021 due to government restrictions on redevelopment and disruption to construction caused by the pandemic. The Korean economy has also seen steady growth, bolstering both international and domestic investment.

The Ministry of Finance of Singapore announced on November 15 that every Singaporean adult will receive S$200 to S$800 from the Assurance Package in December. This will apply to Singaporeans aged 21 and above in 2024.

“The Assurance Package aims to help Singaporeans tide through the period of higher inflation and cushion the impact of the GST rate increase. The package includes cash payments, rebates, Community Development Council (CDC) vouchers, and MediSave top-ups,” MOF said in a press release.

When Singapore’s national Budget was rolled out for 2023, Deputy Prime Minister and Minister for Finance Lawrence Wong said that the Government would be enhancing the Assurance Package to address higher inflation levels, giving more support to Singaporeans to help with higher living costs.

For most Singaporean households, the enhancement will offset additional expenses due to the higher Goods and Services Tax (GST) for at least five years. For lower-income households, the enhancement will take effect for around 10 years.

The Singapore Deputy Prime Minister also announced on October 28 an additional $1.1 billion Cost-of-Living Support Package that will especially help lower- to middle-income households, bringing the total Assurance Package to over S$10 billion.

The Africa Investment Forum (AIF) 2023, which took place in Marrakech, Morocco from November 8-10, has achieved considerable success by securing $34.82 billion in investment interests for projects across the continent.

Organised by the African Development Bank (AfDB), the AIF serves as a multi-stakeholder and multi-disciplinary platform aimed at advancing projects to bankable stages, raising capital, and expediting deals to financial closure. Its overarching vision is to direct capital towards critical sectors to achieve the Sustainable Development Goals, AfDB’s High 5s, and the African Union’s Agenda 2063.

Investment opportunities were explored in diverse sectors, including food and agriculture, renewable energy, mining, transport corridors, aviation, deep-water seaports and railways, ICT, digital infrastructure, artificial intelligence, creative industries, and health.

A significant development at the forum was the establishment of the Alliance for Special Agro-Industrial Processing Zones (SAPZ) with an initial commitment of $3 billion from key partners, including the AfDB, the Africa Export-Import Bank (Afreximbank), the United Nations Industrial Development Organisation, and Arise Integrated Industrial Platforms.

The newly secured commitments include $1.1 billion from the African Development Bank Group, $1 billion from Afreximbank, $300 million from the Islamic Development Bank Group, and $600 million from Arise Integrated Industrial Platforms and its partners.

Recent findings from SBI Research reveal a significant drop in India’s unemployment rate, reaching a record low. The Periodic Labour Force Survey report indicates a notable decrease from 6.1% in the fiscal year 2018 to 3.2% in 2023. SBI Research’s analysis further notes a rise in self-employment, climbing from 13.6% to 18.3% during the same period.

The shift is accompanied by an increasing trend in higher educational attainment and a growing preference for entrepreneurship across diverse segments of society. The report underscores a societal shift in India, transitioning from traditional employment models to more dynamic and self-sustaining business approaches.

Notably, the labour force participation rate has experienced a boost, particularly among women. The female labour force participation rate has surged from 17.5% to 27.8% between 2018 and 2023, with the most significant increase observed in the 15-29 years’ age bracket. SBI Research attributes this rise in female participation to financial inclusion initiatives such as the Pradhan Mantri MUDRA Yojana, which has substantially increased disbursement amounts and deposit figures for women.

However, the report also suggests that the distribution of unemployment rates across various educational levels and states paints a complex picture.

Union Minister Piyush Goyal on November 14 said that US electric car manufacturer Tesla Inc. is in the process of doubling its imports of components from India. He shared the information on the social media platform X after his visit to Tesla’s state-of-the-art manufacturing facility in Fremont, California, US.

The minister said in September that Tesla was aiming to source components worth between $1.7 billion and $1.9 billion from India this year, having bought $1 billion of components last year.

Piyush Goyal was, however, unable to meet Tesla chief Elon Musk during his visit to the plant. The minister’s visit to the US was supposed to include discussions with Musk around the world’s largest electric car producer’s plans to set up an Indian factory, manufacturing a $24,000 car at this factory, sourcing more components, and establishing charging infrastructure across the nation.

Responding to the Indian minister’s post on X, Musk said, “It was an honor to have you visit Tesla! My apologies for not being able to travel to California today, but I look forward to meeting at a future date.”

Piyush Goyal was in the US on a four-day visit. In June, Elon Musk met Prime Minister Narendra Modi in New York. After the meeting, Musk had said that he planned to visit India in 2024.

Prime Minister Narendra Modi on November 15 launched the Rs. 24,000-crore Pradhan Mantri Particularly Vulnerable Tribal Groups (PM PVTG) Mission for the holistic development of around 28 lakh PVTGs in the country.

While announcing the mission from Birsa College ground in Jharkhand’s Khunti district, PM Modi also released Rs. 18,000 crore as the 15th installment of Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme to more than eight crore beneficiary farmers across the country.

Launched on the occasion of the third Janjatiya Gaurav Diwas, the PM PVTG mission will provide basic facilities such as road and telecom connectivity, electricity, safe housing, clean drinking water and sanitation, improved access to education, health and nutrition and sustainable livelihood opportunities to PVTG habitations, which are mostly remote, scattered and inaccessible.

The PM-KISAN scheme is one of the world’s largest Direct Benefit Transfer (DBT) schemes, which aims to support farmers in meeting their agricultural and other incidental needs. Under the scheme, a financial assistance of Rs. 6,000 per year is transferred into the bank accounts of beneficiary farmers through DBT in three equal installments. The Prime Minister transferred the amount digitally by clicking a button.