Global

OECD Cuts Global Growth Forecast For 2014. The global economy will grow by less than expected this year as growth in developing economies slows, The Organisation for Economic Co-operation and Development predicts. It expects 3.4% world growth this year, down from its 3.6% November forecast. In 2015, however, it still expects growth of 3.9%. It cut forecasts for China and the US. "We are still not out of the woods yet," said OECD Secretary General Angel Gurria. The OECD now forecasts 7.4% growth in China for this year, down from its 8.2% November forecast. Meanwhile, the US economy is forecast to grow 2.6% this year against last November's 2.9% estimate, because of a combination of bad weather in December and October's government shutdown. However, it increased its forecast for the euro area, predicting growth of 1.2% against its November forecast of just 1%. (BBC)

Malaysia

Exports In March Grew By 8.4% YoY on account of continued strength in the demand for electrical and electronics (E&E) and mining goods from Asia, the USA and the EU. For the 1Q14, exports saw a 10.9% rise compared to a 2.6% fall seen in the same period in 2013. Imports growth on the other hand was rather subdued in March, rising by 0.5% following a 9.5% increase in February. Despite a better exports performance, trade surplus narrowed to RM9.6b from RM10.4b whilst total trade increased by 4.6% annually, from 11.0% in the previous month. (Please refer to Economic Viewpoint for further comments)

Zeti: M'sia Prepared For Capital Inflow, Economy Is Resilient. Malaysia has put in place good policies to ensure that the economy remains vibrant and is prepared for any capital inflow into the country and the region, says Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz. She said Malaysia had demonstrated that its economy was resilient, adding that the volatility in the capital flow was not unique to the country. “We saw inflows as well as reversals and we believe our financial system can cope with this kind of volatility. Of course, we absorb and sterilise these inflows but at the same time, we have implemented macro-prudential measures to rein in the too rapid credit growth,” she said. (Bernama)

Asia

China Property Slump Adds Danger To Local Finances. China’s weakening property market poses an increasing danger to local governments, threatening to strain their finances and intensify an economic slowdown. Land sales in 20 major cities fell 5 % in March from a year earlier, the biggest drop in at least a year, according to China Real Estate Information Corp. data compiled by Bloomberg. The value of land sales in third-tier cities declined 27 % last month, according to SouFun Holdings Ltd., the nation’s biggest real-estate website owner. (Bloomberg)

USA

Productivity Of U.S. Workers Decreased In The First Quarter. American workers were less productive in the first quarter as harsh winter weather prevented some from getting to their jobs, causing the economy to stall. The measure of employee output per hour dropped at a 1.7 % annualized rate, the weakest reading in a year, after rising at a 2.3 % pace in the last three months of 2013, a Labor Department report showed today in Washington. The median forecast in a Bloomberg survey of 59 economists called for a 1.2 % drop. Unit labor costs climbed at a 4.2 % rate, more than estimated. (Bloomberg)

Consumer Credit In U.S. Climbs By Most In More Than A Year. Consumer borrowing rose in March by the most in more than a year as Americans stepped up credit-card use and took out school and auto loans. The $17.5 billion increase in consumer credit was bigger than projected and followed a revised $13 billion February advance that was smaller than initially reported, the Federal Reserve reported today in Washington. Non-revolving loans, including borrowing for cars and college tuition, rose by the most in six months. (Bloomberg)

US Trade Deficit Pulls Inward In March, Helped By Export Surge. The U.S. trade deficit narrowed in March as exports rebounded, but the improvement was probably not enough to help first-quarter growth. The Commerce Department said on Tuesday the trade gap fell 3.6 % to $40.4 billion. February's deficit was revised to $41.9 billion from a previously reported $42.3 billion. Economists polled by Reuters had forecast the trade deficit falling to $40.3 billion in March. When adjusted for inflation, the trade deficit dipped to $49.4 billion from $49.8 billion in February. (Reuters)

Yellen Says ‘High Degree’ Of Accommodation Still Needed. Federal Reserve Chair Janet Yellen made it clear she believes the economy still requires a strong dose of stimulus five years after the recession ended because unemployment and inflation are well short of the Fed’s goals. “A high degree of monetary accommodation remains warranted,” Yellen said today in testimony to the Joint Economic Committee of Congress. “Many Americans who want a job are still unemployed,” and inflation is below the central bank’s 2 % target, she said. (Bloomberg)