Asia's business news

Singapore economy has succumbed to pressures and slipped into recession

By the BBC's business reporter Bridget Fallon in Singapore

We started the week with news that Singapore had officially slipped into a recession.

The territory's gross domestic product (GDP) numbers fell by an annualised 10% in the last three months compared with the previous quarter.

Singapore relies heavily on high-tech exports and has been badly hit by the slowdown in US IT spending.

Following the news the Singapore dollar fell to an 11-year low against the US dollar.

One bidder left in the race to buy a 26% controlling stake in Air India

And the currency is expected to weaken further after the Monetary Authority of Singapore, the de facto central bank, shifted its policy on the currency to a neutral bias on Thursday.

The Government has also pledged to introduce a series of measures to help the economy.

Air India

Moving on to India where there is just one bidder left in the race to buy a 26% controlling stake in Air India.

This comes after the Government disqualified the Hinduja brothers from the race.

The British-based brothers were dismissed under new guidelines relating to the track records of bidders for state owned firms.

The Hinduja brothers were allegedly involved in a bribery scandal in 1996. They deny any wrongdoing.

The remaining bid comes from Singapore Airlines in partnership with Tata, a leading industrial group.

Philippines

The Philippines' biggest food and drinks group, San Miguel, is in talks to buy Cosmos Bottling.

If RFM sells the country's number-two soft drinks group, it will give San Miguel 90% of the market.

In February it bought Coca Cola Bottlers Philippines, which accounts for 67% of local soft drinks sales.

New Zealand

Air New Zealand lodged a formal submission with the government to lift foreign ownership restrictions on Friday.

The airline wants to allow Singapore Airlines to increase its 25% stake to help raise money for a new fleet.

The New Zealand Government has repeatedly said that any change in restrictions would be difficult.

Qantas has also put forward a proposal of buying a stake in Air NZ and selling Ansett Australia to SIA.

Taiwan

On Friday a top think tank cut its GDP outlook for Taiwan by more than half.

The state-funded Academia Sinica slashed its forecast for the island's 2001 economic growth to 2.38%.

Taiwan's first-quarter GDP showed the slowest growth in 26 years at just over 1% and second quarter economic growth is widely expected to remain weak.

Taiwan is heavily dependent on high tech exports and last month electronic exports fell by 29% compared with last year.

Japan

We ended the week, as we do every fortnight, with the Bank of Japan meeting.

As expected, the bank left its monetary policy unchanged.

The BOJ has made it clear it will not move on rates until it sees some evidence of the promised structural reforms.

On Wednesday the current account surplus plunged 46% in May.

But despite these latest gloomy figures also on Wednesday, for the first time in half a year, the government did not downgrade its assessment of the economy.