12/08/2013 World Business Report

BBC World News. Now for the latest financial news with World Business

Report. Japan's economy expanded at a slower pace than most analysts

expected in the second quarter. So, is Prime Minister Abe's Abenomics

working? And, how can a rather large hole in

the ground help European growth? We travel to the Belgian town of

Antwerp to find out. Welcome to World Business Report,

I'm Alice Baxter. In a minute we'll go to Singapore for some very

positive growth figures there. This must be music to the ears of

Japanese Prime Minister Shinzo Abe. The country's economy grew 0.6% in

April-June from the previous quarter, marking the third straight

quarter of expansion. This adds to growing signs of the positive

effects of Mr Abe's reflationary policies are spreading. However it

may not e as rosy as it first seem, the increase was smaller than the

average market forecast of 0.9%. If we recalculate the numbers to an

annual figure we land at 2.6%, that too is lower than forecast. All this

adds to the debate over whether Japan is strong enough to sustain a

planned 3% bump in its sales tax to 8% next April, the Prime Minister

deciding in the coming moths whether to proceed. Masayuki Kichikawa is

Chief Japan Economist at Bank of America-Merrill Lynch and he joins

me now from our Tokyo studio. Thank you the journey in the programme. Is

Abenomics working? Yes, I think it is working, consumption is going

solid. It is supported by higher asset prices. There has been income

growth. The most important pieces information released today is the

fact that employee compensation has begun increasing. This is the

highest normals -- nominal increase since 2008. This number means that

it is functioning. Looking into the data closer now, we see that the men

contributed to the growth in Japan in the past quarter are from public

spending and exports. That is in spite of the weaker yen. Private

investment weakened. Money spent by private companies.

That is true. Probably the weakest part was the spending decreasing.

Usually it takes about half a year or a year for that to begin

increasing. We are not pessimistic about the numbers. We can expect it

to begin growing in the near future. Of course, the recovery we have seen

in exports, but has been a great success. Do we expect that trend to

continue? Yes, it will heavily depend upon the economy. The outlook

for the US economy and Asian economies, especially south-east

Asian countries, is not very bad. Economies in these regions are

likely to completely grow, even in the next year. With the impact of

the cheaper yen, we can expect the export growth to support economic

growth in Japan. Thank you. The countries of the Euro currency

zone may have shown some early signs of recovery. But have they really

reached a turning point? We should find out this week when we get to

see the latest growth figures for the entire eurozone. We know things

are dire in Southern Europe. But is business in the North still under

water? Our Europe business correspondent reports now from

Belgium, and the Port of Antwerp, which is betting billions on a new

riverside gateway to improve its position as an inland logistics hub

serving 140 million Europeans. It is the third of a mile long, and as

wide as eight 19 lane motorway. This will become the world's biggest

loss, bring the next generation of container ships into the heart of

Europe. This investment is going against the tide in a country where

business credit is tight and that banks are still licking their

wounds. This store is building on the position as the continent's main

fruit bought. The quality of the imports is not in doubt. Export

growth may be limited. We are holding up for when the new lock is

ready. We believe much more accessible. -- we will be much more

accessible. We are exporting a la things. The vessels are full and

they leave here. It is all a big bet on the kind of trade that Belgium

could attract. Behind me here is a huge dock. We have lots of

containers. We also see old cars, new cars. It is growing

tremendously. Some products are no longer route produced here on the

European continent. They are important. 100 years ago, Antwerp

could the Titanic. By the 1960s, many felt this port, with his tides

of up to seven metres, had reached its limit. Thanks to recession,

lusty's work was 1.5% down. Super-size in the port may help the

country get a bigger share of world trade. It will be essential if

Europe's sixth-largest economy is to deliver better results.

And as we await those all important GDP numbers this week, Nigel Cassidy

moves across the border to Rotterdam in the Netherlands, where he finds a

burst housing bubble is damaging personal and bank credit-worthiness

and holding back the recovery. Singapore's economy grew at a

better-than-expected pace in the second quarter and the government

raised the city-state's outlook for the year. Sharanjit Leyl is right

there in our Asia business hub. Sharanjit, you are in the right

place, tell us more. That is right. Singapore's economy

is quite unlike Japan, it grew more than expended, expanding 15.5%.

Economists expected just 14% growth. Quite staggering numbers. Last week,

Singapore's prime minister rose the full-year outlook. He said the

country was growing well despite global uncertainties. There is a

downside. The forecast for exports has been lower down. That has been

blamed on slowing expansion in China. In June, Singapore's exports

saw their longest run of declines since the GST. Electronic exports

slumped. Many nations in the region have seen exports as low as growth

starts to slow down in China. The Singapore dollar strengthened

against the US dollar, following August news. We know that the

central bank of Singapore have been allowing gradual gains in the

Singapore dollar. It is a way of tweaking inflation, since most of

the food and goods are imported. We did see the rise in outlook. Still a

lot of challenges ahead. Thank you.

In other news: Most big financial firms will have to set a target for

the number of women on their board of directors from 2014. The rules

are part of a binding European Union Directive. As well as setting a

target, big banks, building societies and investment firms will

also have to explain how they are going to meet their goal.

Billionaire inventor Elon Musk will reveal the alpha design behind his

Hyperloop rapid transit system later today. It's been described as a

cross between a Concorde and a rail gun and an air hockey table. The

scheme, first announced in July 2012, could enable travel below or

above ground at over 685mph involving a pod about two metres