Rice prices set to rise over rest of the year

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

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THAI RICE prices are expected to climb steadily over the remainder of the year, mainly because of the impact of drought on rice production globally and at home.

However, there are still factors that could suppress prices, including the world economy, financial woes in some countries and uncertainty over the oil price, as it affects the purchasing power of some nations that import rice.

Duangporn Rodphaya, director-general to the Foreign Trade Department, said rice prices were expected to increase continuously in the coming months because of these factors, while global and domestic demand were unchanged.

She said that with the low supply of rice and stable demand, the government would carefully consider the management of its rice stocks and the release of rice, with about 10 million tonnes currently in state stockpiles.

With high demand, the government expects Thailand should break its rice export target of nine million tonnes this year.

The department reported that from January 1 to May 16, Thailand exported 3.9 million tonnes, up 18 per cent compared to the same period last year, while the value rose 11.8 per cent to Bt60.99 billion.

Duangporn said many countries in Africa such as Mozambique had approached the government to purchase rice on credit.

She said that to sell rice ion this manner required the Commerce Ministry to first speak with the Finance Ministry to ensure the government would be paid.

Any contract would be on a government-to-government basis.

Duangporn said the government may talk to business groups and banks to find the best method for selling rice.

But she said the government did not sell rice via barter or counter trade.

Kingdom’s move toward GHG reduction

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

http://www.nationmultimedia.com/business/Kingdoms-move-toward-GHG-reduction-30286147.html

GREENHOUSE

A power-recharging corner at a Bangkok shopping mall. Shopping malls will be encouraged to come up with energy-management plans to help country reduce greenhouse gas. /Achara Deboonme

A power-recharging corner at a Bangkok shopping mall. Shopping malls will be encouraged to come up with energy-management plans to help country reduce greenhouse gas. /Achara Deboonme

BEFORE YEAR 2010, greenhouse gases (GHGs), climate change and low carbon were like alien words to Thai communities, said Vijai Amaralikit, chairman of the National Municipal League of Thailand’s environment sub-committee.

Awareness grew after education programmes by government environment units including the Thailand Greenhouse Gas Organisation (TGO). And now, 100 cities nationwide have been chosen as pilot projects, setting their sights to become low-carbon cities, he added. To achieve the goal, they are focusing on growing more trees, cutting down pollution, reducing energy consumption, and campaigning for sustainable consumption.

“Communities are the right choice to begin with as they are close to people. They can raise awareness among people.”

“We have learnt how to help the world in reducing GHGs,” he said, adding that these cities would in turn share their insights with others to increase the number of participating cities.

Vijai shared the information with the audience attending TGO’s event last month, hosted to announce the World Bank’s US$3 million grant (approx. Bt100 million) to help Thailand meet the national carbon emission reduction target. Thailand is among 30 countries becoming members of the bank’s Partnership for Market Readiness (PMR) – a global alliance to reduce GHG emissions and energy consumption in developing countries.

Advice is being sought to develop instruments to put a price on carbon, believed to be the most effective way to reduce energy consumption and channel financial gains to other social needs. At the UN Climate Change Conference or COP 21, Thailand, the world’s 22nd largest CO2 emitter, was committed to reducing GHG emissions by 20 per cent by 2030 from the business-as-usual level in 2010.

“There are instruments, but applying them poses political, economic and social challenges to each country,” admitted Waraporn Hirunwatsiri, the World Bank’s senior environment specialist.

The options can be implicit or explicit. Implicit carbon prices may equate to higher fuel taxes or feed-in-tariff on electricity prices. Explicit instruments may involve carbon taxes or emission trading or subsidy cuts.

“Our aim is to send a signal to economic actors that in every business decision, environmental costs must be factored in… Emission has a price and it’s not right to pass it on to others,” she said.

At the end of 2015, 13 countries have completed roadmaps for PMR activities and $53 million has been allocated to prepare for PMR initiatives. As a member of PMR, Thailand will hear and share lessons with other participating countries including China, Brazil, Mexico, India, Indonesia and Vietnam.

In 2013, China – the world’s largest producer of emissions, introduced a carbon trading system in 7 cities with the ambition of eventually imposing it across the nation in 2017.

In 2015, 525 types of business in 23 sectors in South Korea, which emit two thirds of total emission, joined a similar scheme, under the national aim to reduce carbon emission by 30 per cent within 2020.

Waraporn said that success required leadership from the government sector and participation from the private sector. Implicit or explicit approaches could somehow dent the business sector’s competitiveness, given differences in pricing levels in different countries, she noted. While the government must be clear in its policy direction, the business sector must be committed in participation.

Investment could be shifted towards countries with less stringent rules, she said, while trust in the government would remain if financial gains were geared towards the poor or tax adjustment or public transport projects that benefit a large number of people.

Different government agencies have worked to achieve the emission target. The Industry Ministry this year imposed car tax scales that are levied according to emission levels. Thailand also has carbon labels on electrical appliances.

According to Pongvipa Lohsomboon, the grant involves a process to prepare four areas by June 2018.

The first involves energy performance certificates to buildings and factories that ably reduce energy. This is in line with the plan of the Energy Ministry’s Alternative Energy and Development Department to reduce energy consumption of about 9,000 large-sized buildings across the nation. In sight are shopping malls, hospitals, hotels, office buildings and a variety of factories.

The second involves the low-carbon city programme.

Municipalities and local communities’ plans will be assessed for higher energy efficiency. Under this scheme, municipalities will be encouraged to include renewable energy in their plans, grow more trees and reduce methane generated by waste from the agricultural and farm sectors in their areas.

The funding will also help to lay down an emissions trading scheme and funding a project management unit.

Exit of Dawei labourers here likely

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

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Members of Dawei National Development Association (DNDA) consult with the senior monk from Myanmar at Wat Thepnorarat in Samut Sakhon. Monks are regarded by Dawei workers living in Thailand as their spiritual leaders.

Members of Dawei National Development Association (DNDA) consult with the senior monk from Myanmar at Wat Thepnorarat in Samut Sakhon. Monks are regarded by Dawei workers living in Thailand as their spiritual leaders.

BENEFITING from the country’s newly elected government and open-market policy, which will attract more foreign investment, the Dawei business community in Myanmar is expecting rapid development that will lure many Dawei workers in Thailand back home.

Surasak Saeyang, chairman of the Dawei National Development Association (DNDA), said most migrant workers from Dawei who work in Thailand are not well-educated.

“However, they want to learn everything regarding their work here in Thailand, as well as develop their work skills during their time in the country,” he said.

Surasak said that every job that Dawei workers experienced in Thailand would be invaluable experience and benefit them when returning to work in their home region.

They will then be able to help develop Dawei, as the working cultures of Dawei and Thailand are quite similar, he added.

“I believe that the establishment of the newly elected government in Myanmar will lead to a better investment climate in the country. And, within the next six months, all government agencies will be systematically established to run the country,” he said.

“I personally believe that the political system in Myanmar will be better and more sustainable than that in Thailand in the future,” said the 39-year-old.

Surasak has been in Thailand for almost 30 years, starting off in the Kingdom as a construction worker.

He now owns a van to provide a travel service within the Kingdom, as well as to and from Myanmar.

Migrant workers from Dawei formed the DNDA about one and a half year ago with the mission to help underprivileged people and local society in general.

“The DNDA also helps Dawei people that face problems while working in Thailand,” he said, adding, “We also want to preserve Dawei culture and tradition, which have been eroded for 60-plus years since the end of World War II.”

“Dawei itself had been administrated by 52 generations of kings. It is one of the major ethnic groups in Myanmar, similar to the Mon, Bagan and Yakai,” he explained.

Myanmar has 135 ethnic groups, of which nine are major ones.

With more than 3,000 members in Thailand, similar branches of the association have also been set up in other neighbouring countries, including Malaysia and Singapore. In Thailand, the DNDA has offices in Kanchanaburi and Samut Sakhon.

The major problem Dawei workers face while staying in Thailand is being cheated by their employers, as well as by the individual brokers that bring them into the country, Surasak said.

Many employers commit to giving their workers a full salary and benefits, but the actual payment received is generally much lower than what has been promised, he said, pointing out that the migrant workers have to pay a great deal of money to get their work documents in order, and for their work visit to Thailand.

“Dawei workers would like to have a temporary visa, which lasts for three months to one year, so that they are not discriminated against in terms of their human rights and have the freedom to travel and find a job anywhere within the Kingdom,” the DNDA chairman said.

Saichan, an ethnic Mon worker in Samut Sakhon, said there were more than 20 groups of Mon workers in Samut Sakhon province alone, including those at Wat Thep Norarat, Wat Kok, Wat Sirimongkol, Wat Pa Tha Sai and Wat Pom Wichian Chotikaram.

Each Mon group has its own leader, while they keep in contact with each other via telephone and the Line social app on a number of important issues, especially religious matters and daily living, as well as on the preservation of Mon culture and identity, he said.

“We are of Mon nationality, with our own religious belief, language, way of dress and identity,” Saichan stressed.

He added that the groups also joined together for any religious ceremonies, and when Mon abbots were invited over from Myanmar to give Dhamma talks, and to lead prayer and meditation.

Better deal for migrant workers but not illegals

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

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Dr Kiatanantha Lounkaew, dean of the Faculty of Economics at Dhurakij Pundit University.

Dr Kiatanantha Lounkaew, dean of the Faculty of Economics at Dhurakij Pundit University.

LEGAL MIGRANT workers might be enjoying better working conditions including improved safety in Thailand but those working illegally suffer an inferior standard of living and their plight is largely invisible, according to academic surveys.

Dr Kiatanantha Lounkaew, dean of the Faculty of Economics at Dhurakij Pundit University, has examined quantitative and qualitative research conducted by various government and international agencies from 2012-2015.

“Our research found that migrants who came to work legally tend to enjoy better and safer working environments. Their access to public services such as healthcare and the education of their children have been in proving in the past three years. The Thai government, local governments, employees and NGOs [non-government organisations] in these areas have been instrumental in making these positive changes possible,” he said.

Kiatanantha said that while international pressures had been the key driving force behind the optimistic trend, there were other important reasons.

Interviews with employers revealed that having legal migrant workers is a plus to a business, especially if they are part of an export supply chain. Therefore, in order to keep their workers from running away to other employers or going underground, employers must offer an employment package that will ensure that these workers have a reasonably good standard of living, Kiatanantha said.

A large majority of workers earn at least at the minimum wage. For those who possess a certain level of experience and/or are able to communicate in Thai, they enjoy additional top-up payments. Some employers also offer them in-kind benefits such as accommodation, transportation, vacations, extra holidays, meals and even scholarships for their children to study at school or a learning centre.

“Illegal migrants do not enjoy the same standard of living discussed above,” Kiatanantha said. “Being kept underground means that migrants are invisible to authorities,” he said. “Thus, they have to live in an area with poor living conditions, which lacks proper access to utilities and transportation.

“They are also excluded from public services. It is also hard for them to send their children to a learning centre or a school. Interestingly, some illegal migrants come to Thailand or decide to stay in Thailand unlawfully because they believe that such a choice offers a better prospect compared to living in their homeland.”

Kiatanantha said migrants were not always welcomed by locals. Superficially, he said, one might be inclined to attribute such a perception to discrimination. “But insights from our qualitative interviews said otherwise. Comparative analysis covering cases where migrants and the locals did get along well and cases where both parties were segregated showed that this was attributable to three main reasons.

“First, migrants were less hygiene because there did not receive such an education prior to their coming to Thailand. That was why, by and large, migrant communities were relatively less hygiene than local communities.

“Second, an inability to communicate in Thai made it hard for migrants to have proper contact with the Thais.

“The last reason was because migrants’ use local facilities, especially healthcare facilities, that precludes locals from having proper access to the same service.”

Kiatanantha said the university’s study on locals having a negative reaction to migrants because of a fear of crime was inconclusive.

Ministry, parties launch scheme to incubate digital start-ups

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

http://www.nationmultimedia.com/business/Ministry-parties-launch-scheme-to-incubate-digital-30286399.html

THE INFORMATION and Communications Technology Ministry will sign a memorandum of understanding (MoU) on May 28 with 12 parties to jointly promote the incubation of potential digital start-up businesses, ICT Minister Uttama Savanayana said.

The participating parties include Advanced Info Service, Total Access Communication, True Corp, Bangkok Bank, Siam Commercial Bank, Krungthai Bank, as well as several universities such as Chulalongkorn.

Bt300m project

The ministry has set aside Bt300 million to launch the project, which will be open to applicants in the fourth quarter this year, so they can be trained to develop their own digital start-ups in many sectors.

Applications can be submitted at the ministry, which will then pass them on to different training venues in line with their proposal.

For instance, those interested in developing a start-up in the health and tourism arena will be sent to Chulalongkorn University, while those interested in the robotics industry will be incubated at King Mongkut’s Institute of Technology, Ladkrabang. Those keen on developing engineering entrepreneurships will be trained at both Bangkok University and King Mongkut’s University of Technology, Thonburi.

The banks may provide funding in the form of venture capital to promising applicants, Uttama said.

On May 28, the ICT Ministry will also sign an MoU with the Agricultural and Cooperatives Ministry, the Interior Ministry and the Bank for Agriculture and Agricultural Cooperatives to promote the use of digital technology among farmers.

The Non-formal and Informal Education Office will also take part in the project by educating people at the grassroots level on digital technology, so they will be able to enter the e-commerce channel.

There are some 2,000 community digital technology learning centres across the country, and the ministry aims to install Wi-Fi networks in 600 of them this year.

On-line boom for FMCGs seen

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

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Gareth Ellis, commercial director of Kantar Worldpanel.

Gareth Ellis, commercial director of Kantar Worldpanel.

THE PENETRATION of fast-moving consumer goods (FMCGs) purchased via online and e-commerce channels is expected to increase to about 15 to 20 per cent of Thai households by 2019, says Kantar Worldpanel, a leading market research firm.

“Online shopping in FMCG categories in Thailand is still small, but it is clearly growing on par with the regional trend,” commercial director Gareth Ellis said recently.

Kantar Worldpanel estimates that by the end of this year, online shopping in such daily-use product categories will be undertaken by 4.4 per cent of Thai households, up from 2.7 per cent last year and 1.4 per cent in 2014.

The increase in FMCG products bought via online and e-commerce channels results from the advancement of wireless Internet broadband, which is shaping consumer behaviour in line with an expansion of social-media users, he said.

Among the top FMCG categories, health and beauty products are the most popular items purchased by local consumers, while powdered milk for babies is among the most frequently bought items by parents.

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“Online shopping is now presenting a significant opportunity for growth in FMCG business as its spending per trip averages Bt658, which already outpaces the spending at physical stores like hypermarkets and supermarkets,” he explained.

According to the latest research by Kantar Worldpanel, average spending per trip at hypermarkets and supermarkets is Bt257, while consumers commonly spend Bt95 per trip at convenience stores and Bt51 per trip at mom-and-pop shops.

However, shopping frequency via online channels is 2.3 times a year, which is considerably lower than the frequency at hypermarkets/supermarkets, which is about 26 times annually.

“The latest findings suggest that online shopping has high potential for brands. The key is that the brands should encourage consumers to increase their shopping frequencies via online channels,” Ellis stressed.

Meanwhile, leading retailers in the Kingdom are putting more emphasis on developing their assets and facilities to support their e-commerce.

Retail giant Central Group recently announced the acquisition of Zalora – a leading online shopping site in Southeast Asia.

Pornchanok Tanskul, president of COL, an e-commerce arm of Central Group, said that with the acquisition of Zalora, the group would be able to help stimulate the economy by promoting increased domestic consumption through e-commerce, a retail channel which she said was growing in popularity.

In a recent interview, John Christie, chief executive officer of Tesco Lotus, said his company was continuously developing its online shopping platform with its e-commerce partners in order to cash in on the change in customers’ digital lifestyles and behaviour.

“We are now offering more than 8,000 non-food products via Lazada.com [online platform]. They include electronic devices, beauty and healthcare products,” he said.

 

Vietnam to develop start-up ecosystem

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

http://www.nationmultimedia.com/business/Vietnam-to-develop-start-up-ecosystem-30286380.html

VIETNAM Prime Minister Nguyn Xun Phc has approved a project to develop the national ecosystem for start-ups by 2025 in an effort to fuel a start-up boom.

This was part of initial efforts by the government to boost the development of the start-up community as the country was seeking to become a start-up nation amidst its rapid integration into the global economy.

A start-up is a type of enterprise that can scale quickly, based on intellectual property, technology and an innovative business model.

Developing a supportive ecosystem is critical for the growth of start-up firms, the Ministry of Science and Technology had said previously.

Under the project to develop a start-up ecosystem, the government plans to complete the legal system for start-ups and develop a national e-portal by 2020.

In addition, support will be provided for 800 projects and another 200 start-up firms, 50 of which are expected to raise seed funding from venture-capital investors or get involved in merger and acquisition (M&A) deals, worth an estimated 1 trillion Vietnamese dong (US$44.6 million).

By 2025, the project aims to aid 2,000 start-up projects and another 600 start-up firms, 100 of which are expected to receive venture capital or get involved in M&A deals, worth 2 trillion dong.

Subjects earmarked to receive support include individuals or groups with start-up projects or firms with a high possibility of growing quickly, having been in operation for less than five years from the date of the business registry certificate, and organisations that provide incubation services to start-ups.

Three major goals of the project involve developing start-up incubation zones, enhancing the capacity of start-ups and developing the technical infrastructure for start-ups.

In addition, a national e-portal for start-ups will be built to provide information on technologies, inventions, standards, intellectual property rights and new business models, as well as policies, investments, incubation services and support systems.

Further, incubation activities will be promoted at ministries, in sectors and in localities with potential for the development of start-ups through the establishment of zones with free Internet and a supportive IT infrastructure.

Work on the Vietnam Silicon Valley project, launched in 2013 and sponsored by the Ministry of Science and Technology, will continue as part of Vietnam’s commitment to building a dynamic, advanced start-up ecosystem.

Support for training will also be provided to enhance the capacity of start-ups, while completing the technical infrastructure and adding incentives for loan interest rates and tax and investment policies.

A circular on venture capital funding is also being drafted by the Ministry of Planning and Investment to improve the legal framework for promoting start-ups and to make Vietnam a start-up nation.

A survey by the Amway Corporation in collaboration with German university Technische Universitat Munchen (TUM) and market research company Gesellschaft fuer Konsumforschung (GfK) last year also found that Vietnam had a high entrepreneurial spirit, ranking 7th among the 44 surveyed countries.

However, the percentage of the population who started businesses was low, with only 2.4 per cent compared to the world average of 12 per cent, Nguyen Dac Vinh, First Secretary of Ho Chi Minh Communist Youth Union, said while answering questions from Vietnamese youth in an online dialogue in March.

Commerce may hold fourth rice auction

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

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RICE AUCTION

WITH GOOD response to the recent rice bidding and strong demand in the market, the Commerce Ministry is considering holding the fourth round of rice auctions next month.

The aim is to clear out the government’s stockpiles while serving demand amid the low supplies in the market.

Duangporn Rodphaya, director-general of the Foreign Trade Department, said yesterday that the ministry will gradually release rice from its stocks via bidding.

The fourth round is expected to be for possibly about a million tonnes, she said.

The ministry held the third round for 1.2 million tonnes yesterday, which could draw many rice traders to join.

The 48 traders at the auction proposed to purchase 1.17 million tonnes of rice from 118 warehouses.

“The government is expected to generate good prices from this bidding or earn a total of Bt10 billion from this lot because demand is high and supply is low outside the harvest season,” she said.

The average bid for 5-per-cent white rice was Bt11,276 per tonne against the market price of Bt13,900, and for white broken rice A-1 Super was Bt7,879 per tonne versus Bt11,000.

The price proposed by rice traders for this bidding is quite good since the government’s rice has deteriorated in quality after years of storage in granaries.

The government will on Monday call a meeting of the rice-releasing committee to consider the bidding results and sell rice to the traders with the best bids.

If the government sells this rice lot, it will have about 10.2 million tonnes remaining in inventory.

According to the department, the current government has held 14 rounds of bidding for rice since May 2014.

It managed to dispose of a total of 5.4 million tonnes of rice worth Bt57.6 billion via the bidding.

The government has asked the Chinese government to purchase one million tonnes of rice from the new crop under a new government-to-government contract in order to reduce the glut of rice during the harvest season.

The deal will be negotiated again and finalised next month during the meeting between the Transport Ministry and the Chinese government.

Regional luxury travel market to outpace Europe’s

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

http://www.nationmultimedia.com/business/Regional-luxury-travel-market-to-outpace-Europes-30286314.html

LUXURY TRAVEL

ASIA-PACIFIC’S luxury travel market will see faster overall growth than Europe’s, according to Amadeus Asia-Pacific.

“The Asian luxury travel market is one to watch,” Hazem Hussein, executive vice president for airline commercial, said yesterday.

North America and Western Europe lead the world’s luxury travel market – accounting for 64 per cent of global outbound luxury trips despite only making up 18 per cent of the world’s population.

However, the compound annual growth rate in luxury outbound trips for Asia-Pacific from 2011-25, projected at 6.3 per cent, will be higher than Europe’s 5.3 per cent.

Leading the region are India at 12.8 per cent and China at 12.2 per cent.

India’s projected growth is the highest of the 25 countries explored by Amadeus and presents great potential for luxury travel investment over the coming decade.

Growth in luxury travel will outpace overall travel, spurred by consumers’ desire for life experiences.

Over the next 10 years, growth in outbound luxury trips is projected at 6.2 per cent, almost a third greater than 4.8 per cent for overall travel.

Hussein said the Asian luxury travel market presents a lucrative opportunity for travel players but will not be an easy one to crack.

“Asian luxury travellers have a unique set of motivations and needs.

“Truly understanding what drives their travel behaviour will be critical for travel providers looking to tap into that segment.”

Amadeus’ report, “Shaping the Future of Luxury Travel”, reveals the fresh challenges and opportunities that the luxury travel market will face over the next decade.

Last year, Amadeus released a report called “Future Traveller Tribes 2030”, which identified six traveller tribes based on consumer behaviour, recognising that purchasing patterns change depending on the circumstances of each trip.

Using similar methodology, the new report identifies six luxury traveller tribes to help travel providers better target their luxury customer market – always luxury, special occasion, bluxury, cash-rich, time-poor, strictly opulent and independent affluent.

“Luxury means different things to different people and this is especially true today.

“As emergent middle classes seek the material aspect of luxury travel, more mature markets are craving a new, evolved kind of luxury.

“This is why offering luxury customers a relevant personal and exclusive experience will become even more crucial than it is today – it will be a differentiating factor between old and new luxury.

“Exploring the latest technologies and innovations for making the industry work better as a whole is key to achieving a new level of luxury that has never existed before,” said Rob Sinclair-Barnes, strategic marketing director at Amadeus IT Group.

The report was commissioned by and developed with data from Tourism Economics as well as expert interviews with global luxury travel experts across specialist travel concierge agencies, airlines, hoteliers and intermediary suppliers through Connections, a global networking event organiser for luxury travel providers.

Weak growth in emerging markets to dampen global economy

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

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GLOBAL ECONOMY

WEAK GROWTH in emerging markets, driven by low commodity prices and waning export demand, will continue to act as a drag on the global economy this year, says Moody’s Investors Service.

Moody’s has lowered its 2016 growth forecasts for Argentina, Brazil, Mexico and Turkey, as the effects of the weaker external demand and lower commodity prices have compounded domestic structural and political challenges. We currently forecast G20 emerging markets growth at 4.2 per cent for 2016 compared to 4.4 per cent in 2015. For G20 advanced markets growth is forecast at 1.7 per cent for 2016 compared to 1.9 per cent in 2015.

“The global recovery has weakened further and the outlook across countries remains uneven and largely weaker than in the previous two decades,” said Elena Duggar, an Associate Managing Director at Moody’s.

“Global trade remains subdued, while spillovers from emerging markets shocks to financial markets globally have increased substantially.”

A more pronounced slowdown in China’s economy than anticipated is currently one of the biggest risks to the global economy. Slower growth in China, the world’s second-biggest economy, could have a significant knock-on effect on global growth by increasing risk aversion, ramping up financial market stress, and souring sentiment.

China’s economy will slow gradually from 6.9 per cent in 2015 to around 6.3 per cent in 2016, guided by policies intended to bolster growth, according to the report “Global Macro Outlook 2016-17 : Further Weakness in Emerging Markets Amid Persistent Downside Risks.”

“The fears of a Chinese hard landing have eased in recent months with data suggesting the economy is stabilising,” said Madhavi Bokil, a vice president and senior analyst at Moody’s.

China’s growth continues to be supported by increased borrowing, which ultimately will increase longer-term risks, particularly within the banking system.

Moody’s expects that Federal Reserve will raise its benchmark interest rate at most twice this year. Policy makers will raise rates gradually, giving investors ample forward guidance as they seek to minimise the negative impact that higher borrowing costs will have on growth and the potential disruption they could cause to global capital markets.