CNA938 Rewind - Frontloading is behind what we have just seen in the economy, but we can't expect it to continue long-term
CNA938 Rewind
Singapore's economy grew slightly faster than expected in the first quarter by 3.9 percent on-year. Still, this is a slowdown from the 5 percent growth seen in Q4 2024, with the Trade and Industry Ministry warning that the global economic outlook remains clouded by significant uncertainty. Lance Alexander and Daniel Martin speak more with Selena Ling, Chief Economist, OCBC.
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CNA
26 minutes ago
- CNA
Commentary: Trump and Musk are fighting. It's difficult to pick a side
SINGAPORE: Once inseparable, United States President Donald Trump and the world's richest man, Elon Musk, are now locked in a very public - and very bitter - divorce. In a matter of days, Mr Musk torched Mr Trump's signature "big, beautiful" Bill, condemned his spending plans, threatened to form a new political party and even suggested the president be impeached. Mr Trump retaliated in kind. He called Mr Musk 'a big-time drug addict', threatened to cut his companies off from government contracts and warned of ' serious consequences ' if the billionaire were to finance Democratic Party candidates running against Republicans. "I have no intention of speaking to him," Mr Trump told NBC on Saturday (Jun 7), saying he believed their relationship was over. Unlike most public spats between public figures, this one offers no easy side to take. The two men are, in many ways, cut from the same cloth. They operate with little patience for deliberation and considerable appetite for the spotlight, and are accustomed to getting their own ways. A PERSONAL FIGHT WITH NATIONAL CONSEQUENCES The trouble with breakups is that any fallout doesn't stay between the warring parties. There's always collateral damage. For example, after Mr Trump threatened to pull government deals with Mr Musk's companies, Tesla shares tanked 14 per cent and lost US$150 billion in value. This very public falling-out carries risks for both men. For Mr Trump, the feud with Mr Musk marks the first major rift with a prominent adviser in his second term. It has shattered the 'bromance' that many assumed would continue and could fracture Mr Trump's support among tech leaders and wealthy donors. Mr Musk, who spent nearly US$300 million in last year's elections, was not only Mr Trump's richest backer, but also a key bridge to Silicon Valley. He helped connect Mr Trump to tech investors and gave the pro-business wing of the Republican Party reason to support the president. Now, Mr Musk's defection could undermine Republican unity on Capitol Hill. His vocal criticism of the debt impact has emboldened some Republican fiscal hawks to oppose Mr Trump's One Big Beautiful Bill Act, which passed the US House late last month. The Bill, which combines tax breaks, spending cuts, border security funding and other priorities, is the centrepiece of Mr Trump's domestic policy agenda. Critics, however, have said it could increase the deficit by as much as US$4 trillion over a decade. If it falters in the Senate due to Republican defections, it would be a significant blow to Mr Trump's legislative agenda. Moreover, Mr Musk's talk of a new centrist party and his massive online influence hint at a potential challenge to the two-party status quo, which should alarm Republican strategists. Although an actual third party is a long shot, even the suggestion feeds a narrative that Mr Trump's brand of Republicanism is alienating a segment of his base. A prolonged Trump-Musk feud could make it harder for Republicans to hold Congress in next year's midterms, given Mr Musk's financial clout and devoted following. FEUD SPREADS TO SPACE Mr Trump, for his part, appears eager to show he won't be dictated to by a billionaire ally. A White House official stressed that the administration is 'not beholden to Elon Musk on policy' and that by attacking the Bill, Mr Musk 'has clearly picked a side' against Mr Trump. In the short term, Mr Trump's hardline stance may shore up his image as a president who puts his agenda above any one person, even the world's richest man. His core base, many of whom harbour scepticism toward tech elites, might even cheer him for standing up to Mr Musk. However, Mr Trump's unpredictable retaliatory streak raises questions in Washington and on Wall Street. Would he really cut off federal contracts to SpaceX and Tesla to punish Mr Musk, even if it jeopardises US interests? NASA and the Pentagon rely heavily on SpaceX for America's spaceflight capabilities and military satellite launches. Pulling the plug on SpaceX partnerships could set back crucial programmes (like the International Space Station transport, Moon missions and defence satellite deployments) and force the government to scramble for alternatives. It's an open question how far Mr Trump is willing to go. Even some within Mr Trump's circle may urge caution, given the billions at stake and the fact that SpaceX's Dragon spacecraft is integral to US-led space efforts (NASA has invested roughly US$15 billion in SpaceX projects). So, while the president talks tough, cutting Mr Musk off is not without consequences. Rattled by Mr Musk's initial threat to retire the Dragon spacecraft, NASA and Pentagon officials have contacted at least three competitors - Rocket Lab, Stoke Space and Blue Origin - to assess their rocket development and availability for government missions, according to a report by the Washington Post over the weekend. CAN MUSK AFFORD TO ALIENATE WASHINGTON? For Mr Musk, this episode is a high-stakes gamble that could redefine his role in the tech and political ecosystems. On one hand, Mr Musk has rebranded himself as an independent voice, unafraid to challenge a president he once supported. This could salvage his reputation among moderates or Tesla customers who were uneasy with his closeness to Mr Trump. By distancing himself from Mr Trump, Mr Musk may refocus attention on his companies' innovations rather than partisan politics. He has already said he will curtail political spending going forward, signalling a retreat from the kingmaker role he played in 2024. On the other hand, Mr Musk is now on a collision course with the US government that could have serious business implications. If Mr Trump were to follow through on cancelling contracts, SpaceX stands to lose enormous revenue (an estimated US$22 billion in government deals is now at risk). Mr Musk must also consider the broader impact on Tesla, which until now has benefited from government electric vehicle (EV) incentives and a friendly regulatory environment. If Mr Trump now views Mr Musk as an adversary, Tesla could face a chillier reception in policy areas important to it (such as environmental credits, infrastructure support or foreign trade deals). AN EXPENSIVE BREAKUP What happens next is very much anyone's guess; it could well depend on what either man decides to post next. The Trump-Musk fallout has escalated from a policy disagreement into a personal and political reckoning. Mr Trump is defending his legislative legacy and asserting authority over a defiant former ally. Mr Musk is recasting himself as an independent visionary, willing to challenge power, but at the cost of political access. Whether this fades or hardens, the consequences will be felt well beyond Washington. Ben Chester Cheong is a law lecturer at the Singapore University of Social Sciences, and of counsel at RHTLaw Asia. He is a visiting fellow in law at the University of Reading, and a centre researcher at the University of Cambridge.
CNA
26 minutes ago
- CNA
Commentary: India market shines amid cloudy outlook for global aviation
NEW DELHI: India was a fitting host of the International Air Transport Association's (IATA) annual general meeting in New Delhi last week. The country has emerged in recent years as a leader in the aviation sector, as Indian Prime Minister Narendra Modi remarked in a keynote address. While IATA now includes more than 350 airlines, with 31 joining over the last year, its Indian members have captured the most attention with rapid growth and massive aircraft orders. IndiGo, which has become one of the world's largest and fastest growing airlines, announced another 10 new international destinations and four domestic destinations for a total of 50 and 95 respectively. IndiGo also used the IATA meeting, which it hosted with unusual fanfare for a low-cost carrier, to announce another 30 orders for A350-900 widebody aircraft. IndiGo now has nearly 1,000 aircraft on order while the Air India group has nearly 600 on order with reported plans for another 200. Air India adopted a much lower profile at the IATA meeting despite its new branding and service improvements. MASSIVE GROWTH POTENTIAL IN INDIA India has become the world's third largest air transport market after the United States and China, reaching 174 million passengers in 2024. IATA forecasts passenger traffic in India will triple over the next 20 years. The country has massive growth potential as it is still relatively underserved. China now has a smaller population than India, but has more than four times the number of passengers and more than five times the number of commercial aircraft. IATA pointed out that India accounts for slightly over 4 per cent of the world's passenger traffic but almost 18 per cent of the global population. India's middle class is growing rapidly along with discretionary income, fuelling soaring demand for both domestic and international travel. Its air transport market has emerged in the post-pandemic era as the next China, which boomed in the decade before COVID-19, particularly for outbound international travel. However, India faces a few geopolitical challenges. The IATA meeting took place just three weeks after the ceasefire to a military conflict between India and Pakistan – a conflict that could have derailed India's first time hosting the meeting since 1983. Pakistan airspace remains closed to Indian carriers, which are now bracing for at least several more months of no access, putting them at a competitive disadvantage to foreign airlines. CHALLENGING MARKET CONDITIONS ACROSS ASIA Geopolitical issues, trade tensions and economic uncertainty are clouding the overall outlook for the global aviation industry. Airline profitability remains low, making the industry vulnerable to shocks. IATA expects airlines will generate US$36 billion in profits on US$979 billion in revenues in 2025, which equates to only a 3.7 per cent net margin or a profit of just US$7.20 per passenger. In 2024, the net profit margin was 3.4 per cent despite relatively buoyant demand and significantly higher air fares compared to pre-COVID levels. In Asia, market conditions remain challenging, despite the growth expectations. Asia Pacific carriers are expected to only account for US$4.9 billion or 13.6 per cent of the global profits this year. This equates to a net margin of less than 2 per cent. When excluding a handful of highly profitable airlines, the industry in this region is collectively only breaking even. Competition is intense and yields or air fares on many regional routes are not sufficient to cover higher costs. Some markets have still not yet fully recovered from the pandemic. Several airlines in Asia are now in a precarious financial position and will likely need to restructure to survive. India's market is exceptional in that it is significantly larger than pre-COVID levels and continues to grow rapidly, but only IndiGo is profitable. Other airlines are unprofitable from several longstanding issues including high taxation and excessive regulation. AIRLINES ARE NOTORIOUSLY RESILIENT The airline industry has never been easy. However, airline executives have never had to navigate such a challenging and complicated environment. In addition to the difficult geopolitical and economic environment, supply chain issues are expected to persist until at least the end of this decade. IATA director general Willie Walsh put pressure on aircraft and engine manufacturers 'to sort this mess out'. Sustainability also comes with an increasingly hefty price tag. The industry is starting to raise concerns about meeting net zero goals with Walsh acknowledging that it does not see new technology playing a significant part in the abatement of carbon emissions before 2050. Nevertheless, the mood last week in New Delhi was still upbeat. Airlines are notoriously resilient and steadfast about long-term growth prospects. India is an undeniable driver for global growth and its leaders are rightly proud of recent aviation achievements.
CNA
5 hours ago
- CNA
Vietnam's EV maker reports US$712 million net loss in Q1
HANOI: Vietnam's first homegrown car manufacturer Vinfast on Monday (Jun 9) said it recorded net losses of US$712 million in the first quarter of the year despite more deliveries. The communist nation's electric vehicle (EV) firm is aiming to compete with global giants such as Tesla, but has struggled to break into the international market. The company said Monday it delivered 36,330 EVs in the first three months of the year, representing a year-on-year increase of 296 percent.
