US has no plans to lend money to IMF

WASHINGTON: The US has no plans to lend money directly to the International Monetary Fund, a senior Treasury official said Friday, as the Fund pitches to boost its resources in the case of financial emergency.

The official, who would not be identified, said the US believes the IMF has enough resources for its needs.

Currently the IMF has $389 billion (291 billion euros) available to lend to its member countries.

IMF Managing Director Christine Lagarde has said it needs to boost its resources to be able to cope with potential large-scale financial meltdown -- with all eyes in recent months on Europe.

On Friday, IMF spokesman Gerry Rice said the Fund "will need more resources should the crisis deepen further," suggesting one source could be bilateral loans from central banks, including the European Central Bank.

"The European authorities -- like some other IMF member countries -- are exploring bilateral loans to the IMF," Rice said in a statement.

"As we have also noted, such loans could indeed come from member country central banks," some of which are already lending to the Fund, he added.

Bilateral loans to the IMF could be turned around and lent on to countries in need, under the Fund's strict conditions for fiscal probity.

Analysts see that Spain and Italy, their finances deeply out of balance and markets pushing up their costs to borrow, could be in line for rescue packages from the IMF.

But the Fund's board, which is already suspicious of committing any more money to the crisis-wracked eurozone, would have to sign off on how any funds are used, including those from bilateral loans.

US jobless rate tumbles to 8.6% in November

WASHINGTON: The troubled US economy and President Barack Obama's embattled administration received a substantial confidence boost on Friday, as unemployment sank to a 32-month low of 8.6 percent in November.

Official figures showed the jobless rate fell sharply from 9.0 percent the previous month, as the economy created 120,000 new jobs.

After a year that saw joblessness linger around 9.0 percent, the report was welcomed with relief.

"Woo-hoo!" said Robert Brusca, chief economist at FAO Economics. "The jobs numbers are looking better."

Analysts also pointed to upward revisions of past reports as evidence that the strength of the labour market has been understated for months.

But while the Labour Department's report was one of the strongest since the global economic crisis began in 2008, it was not uniformly positive.

Economists pointed to a worryingly sharp drop in the number of people looking for work - which helped push down the unemployment rate further than would have been the case.

That could mean more and more jobseekers feel defeated by the relentless slog of finding a new position and are dropping out of the hunt all together.

And the net creation of 120,000 jobs was not as strong as expected, as government job cuts continued to eat into private sector gains.

The net gain was below the average 131,000 of the past 12 months.

But amid renewed global turmoil, the report offered a glimmer of hope that the United States is on the way to reassuming its role as an anchor for the world economy.

"Something good is stirring in the US economy," said Ian Shepherdson, chief US economist with High Frequency Economics.

The news could also provide a boost to Obama's hopes of re-election next November, giving him some defence against Republican claims that he has failed to get the economy back on track since the recession ended more than two years ago.

The unemployment rate now stands only slightly above the 8.5 percent rate that president Ronald Reagan faced at the same point during his successful 1984 re-election campaign.

But with recent data proving a sharp drop in unemployment can easily be reversed, Obama was careful not to declare victory prematurely.

"Despite some strong headwinds this year, the American economy has now created, in the private sector, jobs for the past 21 months in a row," Obama said, sounding a note of cautious optimism.

"That's nearly three million new jobs in all and more than half a million over the last four months," he said.

"We need to keep that growth going."

Obama and his advisers will also be acutely aware that his efforts can be eroded by the financial crisis sweeping Europe.

Attempting to press home the advantage, Obama demanded Republicans back soon-to-expire payroll tax cuts, which the administration says will help stimulate the economy.

Both sides, eager to court voters angry at the sour US economy ahead of the November 2012 elections, say they agree on extending the cut but differ bitterly on how to pay for it in an era of yawning government budget deficits.

But in a signal of the White House's determination to push the issue, Obama said lawmakers may have to stay in Washington until a deal is done.

"I expect that it's going to get done before Congress leaves, otherwise Congress may not be leaving. We can all spend Christmas here together."

"We're going to keep pushing Congress to make this happen," he said.

Republican lawmakers said the drop in unemployment was not enough.

"Any job creation is welcome news, but the jobless rate in this country is still unacceptable," said John Boehner, speaker of the Republican-controlled House of Representatives.

"The president's policies have failed."

Ministry of Finance wants public feedback on Budget 2012 website

The Ministry of Finance (MOF) launched the Budget 2012 website on Thursday with a Feedback Exercise to get feedback on issues and suggestions relating to taxes and public spending for Budget 2012.

In partnership with Reach, MOF welcomes suggestions on issues which the public feels are relevant for Budget 2012. The channels made available include new media platforms such as Facebook, Twitter, as well as discussion forums on Reach's budget microsite (www.reach.gov.sg/budgetsg) among others. From Dec 6-7, the public may share views at the Reach roving exhibition at the National Library Building (Victoria Street).

The MOF will also organise the online Budget Quiz and Budget Challenge 2012. The Budget Quiz will be held every Wednesday on the Budget 2012 website (www.singaporebudget.gov.sg) starting from Jan 4, 2012. Participants can win prizes each week if they answer all the questions correctly.

The Budget Challenge 2012 will be open to university, polytechnic and junior college students, and those from Millennia Institute and in the last two years of their integrated programmes. Prizes will be awarded to the top three teams.

UN cuts world growth forecast, IMF to follow

UNITED NATIONS: The United Nations on Thursday slashed its forecast for world growth to 2.6 percent in 2012 and warned the eurozone debt crisis could further undermine the global performance.

"The world economy is teetering on the brink of another major downturn," the UN said in a warning that came as the International Monetary Fund said it would also lower its global growth forecast.

After rising 4.0 percent in 2010, the UN predicted 2.6 percent world growth in 2012 and 3.2 percent in 2013. UN economists had earlier said there would be 3.6 percent growth next year.

"This forecast is conditioned however on containment of the eurozone debt crisis and a halt to further moves toward stringent fiscal austerity in developed countries," said the UN World Economic Situation and Prospects report.

It said 2012 will be a "make or break year" with the world proceeding with slow economic recovery or falling back into recession.

Developing countries, led by China, Brazil and India, are predicted to continue pulling the world economy forward with average growth of 5.4 percent in 2012 and 5.8 percent in 2013. But even this is down from 7.1 percent in 2010.

"From the second quarter of 2011, economic growth in most developing countries and economies in transition started to slow notably," said the report which hit out at governments in Europe and North America.

The UN revised down its 2012 prediction for every major country and region: it now foresees 1.3 percent growth in the United States, down 0.7 percent from its last forecast, 1.5 percent for Japan (down 1.3 percent), 0.5 percent for the 27 nation European Union (down 0.8 percent), 8.7 percent for China (down 0.2 percent), 7.7 percent for India (down 0.5 percent) and 3.7 percent for South Africa (down 1.1 percent).

In Latin America, Brazil's 2012 growth was put at just 2.7 percent, down 2.6 percent from the earlier forecast.

"Failure of policymakers, especially those in Europe and the United States, to address the jobs crisis and prevent debt distress and financial sector fragility from escalating, poses the most acute risk for the global economy," the forecast said.

"Because of collective inaction, the situation is likely to deteriorate further," Jomo Kwame Sundaram, UN assistant secretary general for economic development, told a press conference to introduce the report.

"Unfortunately the likelihood of the pessimistic scenario is increasingly likely," he added.

The sovereign debt crises in Europe is a "cause and an effect" of the global slowdown while the United States is also suffering from unemployment and "shaken consumer and business confidence," said the report.

As the European and US economies are so close "their problems could easily feed into each other and spread to another global recession," the UN warned.

The IMF said Europe's worsening economy and financial market turmoil meant it was likely to revise downward its predictions made in its World Economic Outlook report issued in October.

"We will likely be revising downwards our forecast," IMF spokesman Gerry Rice told news briefing, without elaborating.

"The global recovery remains unbalanced and bumpy. Since that WEO there has been a marked slowdown in economic activity, especially as we all known, in Europe. The turmoil in the financial market is also contributing to further uncertainty about the economic forecast."

An update will be made in January, Rice added.

Debit-card use may rise amid global turmoil

TWO out of three ATM- or debit-card holders here choose to pay for their daily purchases using PIN-based debit-payment methods such as Nets or Epins, according to a recent survey.

More people are expected to turn to these payment methods in the light of a looming economic crisis, said Korvac Holdings, which conducted the survey involving 452 participants.

The company, which provides services for cashless payments, currently runs Epins - a payment service similar to Nets - for qualifying-full-bank account holders, and Payment Link, which allows consumers to use their ez-link cards to make payments not related to public transport.

"What you see now is that debt and credit are getting a little bit of a bad name. There is an increased feeling that you should really watch your spending," said Korvac's chief marketing officer, Mr Jos Birken.

He added that, in this sense, debit cards are a safer option because they allow cardholders to spend only what they have.

According to market researcher Euromonitor International, the total debit-card payment-transaction value in Singapore amounted to $18.1 million in 2009, and is estimated to hit $27.4 million in 2015.

A mode of payment enabling consumers to pay for goods and services using their mobile phones is also set to tap into the cashless-payment market by next year.

This mobile-payment method is based on NFC (near-field communications) technology, which is already being used in contactless-payment modes such as ez-link cards.

A consortium of seven firms - including telcos SingTel, M1 and StarHub - has been chosen to create and run the network.

At least three mobile- payment services will be made available by the middle of next year, according to earlier reports.

Inflation eases in October but still above 5%

Inflation eased slightly in October, but continues to remain a high level, well above the 5 per cent mark.

The Consumer Price Index rose 5.4 per cent in October from last year, due mainly to higher accommodation costs, private road transport and food.

The Department of Statistics said that transport rose 10.5 per cent in October, compared with last year, while housing rose 9.9 per cent. Food was 3.5 per cent more expensive, said the Department of Statistics.

But, in an indication that inflation has already peaked, the pace of price increases has clearly slowed, with the CPI rising just 0.4 per cent in October, comapared with September.

Govt looking at allowing Medisave for home care services

SINGAPORE : The government is looking at allowing the use Medisave for home care services and reviewing current subsidies to make home care options more affordable.

This was announced by Minister of State for Health, Dr Amy Khor, at the opening of the TOUCH Home Care Centre in Jurong on Wednesday.

78-year-old Sapri Amat suffers from hypertension and cataract, and some months ago, a gout attack left him almost bed-bound.

His wife Madam Piah has cancer.

Their only caregiver - son Mohamad Sapri - left his job about two years ago to care for his elderly parents.

The new TOUCH Home Care Centre in Jurong now provides transport for Madam Piah for her hospital appointment visits.

A nurse and therapist also visit Mr Sapri to monitor his condition and provide home-rehabilitation.

After subsidies, the family pays about S$60 a month for the services - 10 per cent of the total cost.

Madam Piah said: "I feel better. There are now people to look after me. If not, there is only me taking care of my husband, along with my son."

TOUCH Home Care is only the second voluntary welfare organisation (VWO) to provide home care services in the West, an area it said has been under-served, till now. But in just two months, its staff of 10 are now catering to the needs of 30 clients, a number it hopes to expand to some 300 within the next two years.

Besides VWOs providing these services, needy Singaporeans can soon also tap on Medifund for home care services. Some 1,000 Singaporeans are expected to benefit.

But the government acknowledges that cost is still a big factor, and it may also allow the use of Medisave for such services.

Dr Khor said: "Home care will play a substantive role in future as one of the care options for the elderly. The issue of accessibility and affordability of elder care services is critical and we need to address that, so we are looking at ways to grow the home care sector.

"Some of the areas we are looking at include reviewing our subsidies as well as the use of Medisave."

The government is also looking at leave options to alleviate the stress faced by caregivers.

The Agency for Integrated Care and the Centre for Enabled Living will provide TOUCH with a funding of S$700,000 over two years.