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First Post
5 hours ago
- Business
- First Post
Russia's war economy finally showing signs of slowdown: Good news or bad for Ukraine peace?
Russia's economic outlook is growing increasingly uncertain as it grapples with manufacturing declines and inflationary pressures, with the economy minister warning that the country was 'on the brink' of a recession read more Russia's economy, long propped up by heavy military spending, is starting to show cracks under the weight of sanctions and inflation. While wartime government expenditure has kept economic activity afloat, recent data suggests that without this crutch, the country could slide into stagnation. The nation's economic outlook is growing increasingly uncertain as it grapples with manufacturing declines and inflationary pressures. Signs of slowdown in Russia's economy In June, Russia's manufacturing sector took a sharp hit. The Purchasing Managers' Index (PMI), a key gauge of manufacturing health, plummeted to 47.5, marking the steepest contraction since March 2022, according to S&P Global. This was a stark reversal from May's PMI of 50.2, when manufacturing had shown modest growth. STORY CONTINUES BELOW THIS AD The downturn stemmed from a drop in new orders, driven by weak client demand and a strong ruble that has made Russian exports pricier on the global market. As a result, factories were forced to cut jobs at the fastest rate since April 2022 and scale back purchasing activity at a pace not seen in over three years. The broader economy is also showing signs of strain. Russia's economy is overheating, with rising wages and a shrinking workforce fueling inflation that has proven difficult to tame, even with high borrowing costs. In June, Economy Minister Maxim Reshetnikov warned that the country was 'on the brink' of a recession, a sobering acknowledgement of the challenges ahead. Inflation, which spiked to around 10 per cent earlier in 2025, has eased somewhat but remains above the Central Bank's target. In response, the Central Bank of Russia made a notable policy shift, cutting interest rates twice in 2025—first by 100 basis points in June to 20 per cent, and then by 200 basis points in July, bringing the rate to 18 per cent. These cuts reflect growing concerns about an economic cooldown and a need to stimulate lending to bolster activity. STORY CONTINUES BELOW THIS AD Business sentiment is souring as inflationary pressures squeeze consumers and the government signals tougher times ahead. Spending cuts are on the horizon, though slashing defence budgets seems unlikely given the military-industrial complex's role as the economy's backbone. This sector, heavily reliant on opaque financing and state support, faces its own risks. Reduced arms exports, sanctions blocking access to high-tech components, and a growing dependence on costly Chinese substitutes are all taking a toll. Beneath the surface, structural vulnerabilities are becoming harder to ignore. Adding to these pressures is external scrutiny, with figures like US President Donald Trump pushing for peace and threatening even more sanctions, which could further complicate Russia's economic and geopolitical calculations. As Russia stands at this crossroads, the question looms: Will President Vladimir Putin accept a slowdown and focus on stabilising the economy, or will he double down on war efforts to maintain momentum?
See - Sada Elbalad
5 days ago
- Business
- See - Sada Elbalad
Gold Prices Decline Locally and Globally Amid Profit-Taking and Improved Risk Appetite
Waleed Farouk Gold prices saw a notable decline in Thursday's trading, weighed down by profit-taking after the precious metal reached a five-week high. Improved global risk sentiment also reduced demand for gold as a safe haven. In the local market, gold prices fell by approximately EGP 30, with 21-karat gold recording EGP 4,650 per gram, while the ounce dropped by around $25 to $3,365. The other gold price levels were as follows: 24-karat gold: EGP 5,314 18-karat gold: EGP 3,986 14-karat gold: EGP 3,100 Gold pound coin: EGP 37,200 On Wednesday, prices also ended the session lower, with 21-karat gold opening at EGP 4,710 and closing at EGP 4,680. Meanwhile, the gold ounce dropped from $3,432 to $3,390. Selling Pressure on Gold and Silver Amid Improved Global Sentiment Trading opened today with renewed selling pressure on gold and silver, driven by improved investor sentiment following positive developments in global trade. These include the finalization of a trade deal between the United States and Japan, along with reports of a potential 15% tariff reduction between Washington and Brussels. At the same time, the U.S. dollar saw a modest recovery after three consecutive days of losses, which drew some liquidity away from the gold market. However, ongoing uncertainty regarding the timing of interest rate cuts by the Federal Reserve capped the dollar's gains, offering some support to the yellow metal. Markets Eye the Fed Amid Monetary Policy Uncertainty Despite expectations that the Federal Reserve will keep rates unchanged in its late July meeting, markets continue to price in at least one rate cut before the end of Q4. This comes amid growing divisions within the Fed, with key members like Christopher Waller and Michelle Bowman advocating for a rate cut at the upcoming July 30 policy meeting. These internal divisions, coupled with mounting political pressures, add to the uncertainty surrounding the future direction of U.S. monetary policy and weigh on both the dollar and precious metals. Silver Under Market Pressure but Supported by Industrial Demand Silver, meanwhile, has been affected by the general weakness in precious metals. Still, it continues to receive relative support from growing industrial demand, particularly in sectors like electronics, clean energy, and photovoltaic cells. The movement in silver prices also remains influenced by other factors, including U.S. bond yields, the strength of the dollar, and upcoming economic data, all of which may redirect investor sentiment in the short term. Focus Turns to Key Economic Data and ECB Decision Investors are now closely watching a series of key economic indicators due later today, including preliminary Purchasing Managers' Index (PMI) readings, U.S. jobless claims, and new home sales. These data points could reshape market expectations regarding the Fed's next move and the dollar's direction. Meanwhile, attention is also on the upcoming monetary policy decision by the European Central Bank (ECB), which could add another layer of short-term volatility to gold and silver markets. read more CBE: Deposits in Local Currency Hit EGP 5.25 Trillion Morocco Plans to Spend $1 Billion to Mitigate Drought Effect Gov't Approves Final Version of State Ownership Policy Document Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister Qatar Agrees to Supply Germany with LNG for 15 Years Business Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves Business Suez Canal Records $704 Million, Historically Highest Monthly Revenue Business Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday Business Wheat delivery season commences on April 15 News Israeli-Linked Hadassah Clinic in Moscow Treats Wounded Iranian IRGC Fighters Arts & Culture "Jurassic World Rebirth" Gets Streaming Date News China Launches Largest Ever Aircraft Carrier Videos & Features Tragedy Overshadows MC Alger Championship Celebration: One Fan Dead, 11 Injured After Stadium Fall Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt Arts & Culture South Korean Actress Kang Seo-ha Dies at 31 after Cancer Battle Business Egyptian Pound Undervalued by 30%, Says Goldman Sachs Sports Get to Know 2025 WWE Evolution Results News "Tensions Escalate: Iran Probes Allegations of Indian Tech Collaboration with Israeli Intelligence" News Flights suspended at Port Sudan Airport after Drone Attacks
Euractiv
5 days ago
- Business
- Euractiv
Eurozone growth hits one-year high despite Trump's tariffs
Economic activity across the eurozone grew to the highest levels in almost a year this month, a business survey found on Thursday, amid signs that Germany's long-suffering industries could be recovering despite Donald Trump's punishing tariffs. The eurozone's provisional composite Purchasing Managers' Index (PMI), which measures overall activity in manufacturing and services across the single currency area, rose from 50.6 to 51.0 between June and July – an eleven-month high that pushed the index further above the 50-point mark separating growth from contraction. Germany, the bloc's largest economy, continued to expand, although its rate of growth slowed slightly from 50.4 to 50.3. Activity in France, the eurozone's second-biggest economy, also rose to an eleven-month high, but remained in contraction territory at 49.6. 'The eurozone economy appears to be gradually regaining momentum,' said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank (HCOB), which compiles the index together with S&P Global. 'Germany is playing a key role here and, together with other countries, has been able to more than offset the weakness in France,' he added, noting that 'French industry must also regain its footing' for the bloc's manufacturers to 'return to solid growth in the long term'. De la Rubia also noted that 'even higher US tariffs should not fundamentally change' the recovery in German manufacturing, which has been boosted by government pledges to increase investments in infrastructure and defence by up to €1 trillion over the next decade. Trump's tariffs on steel, aluminium, and cars have inflicted severe pain on German manufacturers – especially its export-dependent auto sector, which is already reeling from weak demand and fierce competition from Chinese electric vehicle makers. The US is Germany's top car export destination, with 450,000 vehicles valued at roughly €21 billion sent across the Atlantic in 2024, according to the US commerce department. Uncertainty in France, meanwhile, has been compounded by Prime Minister François Bayrou's controversial draft budget proposal, which was presented to lawmakers last week and aims to cut €44 billion in net government expenditure in 2026. Jonas Feldhusen, junior economist at HCOB, said France's economy is likely to struggle regardless of whether Bayrou's proposal is eventually approved by the country's deeply divided parliament. 'Should an agreement on the austerity package be reached, it would reduce disposable income for many households – posing clear downside risks for domestic demand and especially for the services sector,' Feldhusen said. 'Conversely, failure to reach a budget deal could further escalate political uncertainty.' (mm)
Business Insider
19-07-2025
- Business
- Business Insider
Navigating headwinds: Nigeria's economic outlook for H2 2025
As the second half of 2025 begins, Nigeria finds itself at a critical economic crossroads. With mixed signals emerging from both global and local environments, policymakers, business leaders, and financial institutions must prepare for a delicate balancing act. From shifting geopolitical dynamics to domestic fiscal pressures, the outlook for H2 2025 is characterized by uncertainty but also opportunity. FSDH's latest macroeconomic update, titled 'Balancing on the Edge in a Fragile World,' provides timely insights into what lies ahead and how stakeholders can navigate this complex terrain. Globally, two major developments have reshaped the economic outlook: the return of Donald Trump to the U.S. presidency and the escalation of the Israel-Iran conflict. Trump's reintroduction of import tariffs—10% across the board, with additional levies on selected countries—has renewed global trade tensions, undermined multilateralism, and triggered capital flow reversals to emerging markets. Meanwhile, the Middle East conflict has disrupted oil supply routes, increased freight costs, and spurred volatility in global commodity prices. These external shocks have led the International Monetary Fund (IMF) to revise its global GDP growth forecast downward to 2.8% in 2025, from an earlier 3.3%. Although Sub-Saharan Africa is expected to grow by 3.8%, driven by structural reforms and improved export performance; however the region remains vulnerable to external shocks, especially in energy markets and financial flows. Domestic Realities: Falling Short of Oil Expectations Nigeria, still heavily reliant on oil, has felt the weight of these developments. Despite commendable efforts to diversify her export base, oil remains the lifeblood of government revenue. The Federal Government's ₦54.99 trillion 2025 budget was benchmarked at US$75 per barrel and 2.06 million barrels per day in production. However, actual performance in H1 2025 has fallen short, with oil prices averaging US$72 per barrel and production consistently below target. This has created a growing fiscal gap and raised questions about Nigeria's ability to meet her ₦35 trillion revenue projection. Positive Signs: PMI Growth and Inflation Tapering Despite these challenges, there are positive signals in the local economy. The Purchasing Managers' Index (PMI), a reliable indicator of economic activity, remained above 50 points between January and May 2025, indicating expansion in key sectors such as agriculture, industry, and services. Inflation, while still high, has begun to decline—from 24.5% in January 2025 to 23% by May 2025—thanks to the combination of improved food supply, relative exchange rate stability, and methodological adjustments by the National Bureau of Statistics. Exchange Rate Stability: Progress or Pause? Exchange rate dynamics have also shown signs of stabilisation. The Naira stood at ₦1,539/US$ as of June 2025, reflecting only a marginal 0.2% depreciation year-to-date. The 'willing buyer, willing seller' FX policy has improved transparency and market confidence, although Nigeria's external reserves declined by 8.5% in H1—from US$40.9 billion to US$37.3 billion—due to rising import bills and debt repayments. FSDH projects that exchange rate stability will depend on continued FX inflows, investor confidence, and fiscal discipline. With oil prices expected to hover around US$75-US$78 per barrel, maintaining production and boosting non-oil exports will be critical. Analysts caution that a renewed slump in oil output or a further deterioration in global trade conditions could reignite currency volatility. Fiscal Reform in Focus: Tax Administration Shake-Up A major turning point in H1 2025 came in June, when President Tinubu signed four transformational tax reform bills into law. These include the Nigeria Tax Act, Nigeria Tax Administration Act, Joint Revenue Board Act, and Nigeria Revenue Service Act. Collectively, these reforms aim to harmonise tax administration, improve compliance, and empower a new, independent national revenue service. Highlights of the reforms include raising the Capital Gains Tax for corporates from 10% to 30%, introducing a Development Levy on large firms, zero-rating VAT for essential goods, and exempting small businesses with under ₦100 million turnover from filing taxes. The reforms are expected to grow Nigeria's tax-to-GDP ratio from 10% to 18% within three years. While implementation remains a hurdle—especially at state and local levels—this marks a significant shift in Nigeria's revenue strategy. In the capital markets, optimism is quietly building. The Nigerian Exchange (NGX) posted a 16.6% year-to-date return as of June 2025, outperforming many global indices. Banking and consumer goods stocks led gains, buoyed by strong corporate earnings and macro reforms. Treasury Bill yields and long-term bond rates have declined, signaling renewed investor appetite for Nigerian assets. Foreign Portfolio Investments (FPIs) flows have increased significantly, hitting US$5.46 billion in Q1—a 67% jump from the previous quarter. This resurgence has been fueled by FX reform, positive real interest rates, and improved clarity on policy direction. However, the risk of 'hot money' outflows remains, underscoring the need for deeper, longer-term capital investments. Strategic Priorities for H2 2025 Looking ahead, FSDH outlined several strategic imperatives for economic stakeholders in H2 2025. First, there is an urgent need to boost oil production, not just to meet budget benchmarks, but to enhance export earnings. Second, the country must deepen its non-oil export capabilities, especially in agriculture and manufacturing, to diversify FX sources. Third, unlocking private-sector credit by reducing the high Cash Reserve Ratio (CRR) remains key to real sector growth. Fourth, leveraging ongoing tax reforms to enhance state-level revenue and improve the business climate is vital. Importantly, Nigeria's digital economy and financial technology space also hold promise. The integration of AI, open banking frameworks, and digital payment systems are transforming how financial services are delivered. FSDH notes that institutions that embed digital transformation into their service models will lead in agility, customer retention, and market expansion. Cautious Optimism: Nigeria's Path Forward While global risks remain—from U.S. monetary policy to geopolitical tensions and potential oil shocks—Nigeria has the tools to stay on a path of gradual stabilisation. The success of H2 2025 will depend on disciplined execution of reforms, coordinated fiscal and monetary policy, and institutional accountability. Nigeria's economic outlook for the rest of 2025 is cautiously optimistic. Inflation is expected to decline further which may allow for monetary easing later in the year. The Naira is likely to remain within the current range, while GDP growth will be modest, driven by agriculture, services, and rising investor interest. Structural reforms are beginning to take root, but the second half of the year will require political will, macroprudential discipline, and bold leadership. And as FSDH aptly notes in its report, 'Resilience is not just about surviving the storm; it's about building structures that thrive within it.' Nigeria has the opportunity to prove that in H2 2025.
Fibre2Fashion
16-07-2025
- Business
- Fibre2Fashion
China's GDP grows 5.3% in H1 2025 amid global pressures: NBS
China's gross domestic product (GDP) grew by 5.3 per cent year-over-year (YoY) in the first half (H1) of 2025, reaching 66.05 trillion yuan (~$9.24 trillion), according to the National Bureau of Statistics (NBS). Growth in the second quarter stood at 5.2 per cent, following a 5.4 per cent increase in Q1. On a quarterly basis, GDP rose by 1.1 per cent. The primary sector grew by 3.7 per cent and secondary sector by 5.3 per cent. China's GDP grew 5.3 per cent YoY in H1 2025, reaching ¥66.05 trillion (~$9.24 trillion), with Q2 growth at 5.2 per cent. Industrial output rose 6.4 per cent. Employment remained stable, but industrial profits dipped 1.1 per cent. Sheng Laiyun highlighted the economy's resilience amid global pressures, supported by proactive macroeconomic policies and steady progress. Industrial output climbed 6.4 per cent in H1, driven by strong performance in equipment and high-tech manufacturing. June alone saw a 6.8 per cent rise, up from 5.8 per cent in May. Manufacturing output increased by 7 per cent during January–June period. Among enterprise types, share-holding firms led with 6.9 per cent growth, followed by private companies at 6.7 per cent, foreign-funded firms at 4.3 per cent, and state-owned enterprises at 4.2 per cent. June's manufacturing Purchasing Managers' Index (PMI) stood at 49.7 per cent, up 0.2 points from May. The production and operation expectation index rose to 52 per cent, indicating cautious optimism, NBS said. Employment remained stable, with the urban surveyed unemployment rate averaging 5.2 per cent and easing to 5 per cent in June. Rural migrant workers totalled 191.39 million at end-Q2, up 0.7 per cent year-on-year, with enterprise employees averaging 48.5 working hours per week. However, industrial profit challenges persisted. Between January and May, profits of large industrial firms fell by 1.1 per cent to 2.72 trillion yuan. China's proactive macroeconomic approach has supported steady economic progress. The first-half results are 'highly meaningful' and underscored the resilience shown amid global uncertainties and mounting external pressures, said Chinese media reports quoting Sheng Laiyun, deputy director of the NBS. Fibre2Fashion News Desk (SG)
