Latest news with #PurchasingManagers'Indexes
The Star
2 days ago
- Business
- The Star
World Bank revises Malaysia's 2025 GDP growth forecast to 3.9%
KUALA LUMPUR: Malaysia's gross domestic product (GDP) growth forecast for 2025 has been revised to 3.9 per cent, a 0.6 percentage-point downgrade from January 2025's projection, according to the World Bank's Global Economic Prospects report. The downgrade was attributed to the unpredictable macroeconomic effects of higher trade barriers, which the World Bank said could weigh on growth despite having benefited from fiscal policy support such as social spending programmes and public investment. It also stated that modest fiscal consolidation is expected to continue in Malaysia. Besides Malaysia, other East Asia and Pacific (EAP) countries also saw notable revisions, with the Philippines and Vietnam each experiencing a 0.8 percentage-point downgrade, with growth forecasts lowered to 5.3 per cent and 5.8 per cent, respectively. Thailand's projection was cut by 1.1 percentage points to 1.8 per cent, while Myanmar recorded the sharpest downgrade of 4.5 percentage points, bringing its 2025 GDP forecast to -2.5 per cent, said the report. Global growth is projected to decline to 2.3 per cent in 2025, with a slowdown in most economies compared to last year. This rate of growth will be the slowest since 2008, excluding periods of global recession. According to the report, Malaysia, which is among the economies with large export-oriented manufacturing sectors, is particularly exposed to a reemergence of trade tensions, higher trade costs, and weaker growth in major economies. It said gauges of manufacturing activity, including headline manufacturing Purchasing Managers' Indexes (PMIs) and goods trade indicators, have eased recently. Some trade-exposed emerging market and developing economies (EMDEs), such as Malaysia, have seen the new export orders component of the manufacturing PMI weaken markedly since November amid increasing global trade policy uncertainty, the report said. - Bernama
The Sun
2 days ago
- Business
- The Sun
World Bank revises Malaysia's 2025 GDP growth forecast to 3.9%
KUALA LUMPUR: Malaysia's gross domestic product (GDP) growth forecast for 2025 has been revised to 3.9 per cent, a 0.6 percentage-point downgrade from January 2025's projection, according to the World Bank's Global Economic Prospects report. The downgrade was attributed to the unpredictable macroeconomic effects of higher trade barriers, which the World Bank said could weigh on growth despite having benefited from fiscal policy support such as social spending programmes and public investment. It also stated that modest fiscal consolidation is expected to continue in Malaysia. Besides Malaysia, other East Asia and Pacific (EAP) countries also saw notable revisions, with the Philippines and Vietnam each experiencing a 0.8 percentage-point downgrade, with growth forecasts lowered to 5.3 per cent and 5.8 per cent, respectively. Thailand's projection was cut by 1.1 percentage points to 1.8 per cent, while Myanmar recorded the sharpest downgrade of 4.5 percentage points, bringing its 2025 GDP forecast to -2.5 per cent, said the report. Global growth is projected to decline to 2.3 per cent in 2025, with a slowdown in most economies compared to last year. This rate of growth will be the slowest since 2008, excluding periods of global recession. According to the report, Malaysia, which is among the economies with large export-oriented manufacturing sectors, is particularly exposed to a reemergence of trade tensions, higher trade costs, and weaker growth in major economies. It said gauges of manufacturing activity, including headline manufacturing Purchasing Managers' Indexes (PMIs) and goods trade indicators, have eased recently. Some trade-exposed emerging market and developing economies (EMDEs), such as Malaysia, have seen the new export orders component of the manufacturing PMI weaken markedly since November amid increasing global trade policy uncertainty, the report said.
The Sun
2 days ago
- Business
- The Sun
World Bank cuts Malaysia's 2025 GDP forecast to 3.9%
KUALA LUMPUR: Malaysia's gross domestic product (GDP) growth forecast for 2025 has been revised to 3.9 per cent, a 0.6 percentage-point downgrade from January 2025's projection, according to the World Bank's Global Economic Prospects report. The downgrade was attributed to the unpredictable macroeconomic effects of higher trade barriers, which the World Bank said could weigh on growth despite having benefited from fiscal policy support such as social spending programmes and public investment. It also stated that modest fiscal consolidation is expected to continue in Malaysia. Besides Malaysia, other East Asia and Pacific (EAP) countries also saw notable revisions, with the Philippines and Vietnam each experiencing a 0.8 percentage-point downgrade, with growth forecasts lowered to 5.3 per cent and 5.8 per cent, respectively. Thailand's projection was cut by 1.1 percentage points to 1.8 per cent, while Myanmar recorded the sharpest downgrade of 4.5 percentage points, bringing its 2025 GDP forecast to -2.5 per cent, said the report. Global growth is projected to decline to 2.3 per cent in 2025, with a slowdown in most economies compared to last year. This rate of growth will be the slowest since 2008, excluding periods of global recession. According to the report, Malaysia, which is among the economies with large export-oriented manufacturing sectors, is particularly exposed to a reemergence of trade tensions, higher trade costs, and weaker growth in major economies. It said gauges of manufacturing activity, including headline manufacturing Purchasing Managers' Indexes (PMIs) and goods trade indicators, have eased recently. Some trade-exposed emerging market and developing economies (EMDEs), such as Malaysia, have seen the new export orders component of the manufacturing PMI weaken markedly since November amid increasing global trade policy uncertainty, the report said.
Business Times
4 days ago
- Business
- Business Times
Bank of England risks repeat of Brexit pessimism as growth signals diverge
[LONDON] Bank of England (BOE) rate-setters risk underestimating the strength of the UK economy by placing too much faith in downbeat business surveys over official growth data. Governor Andrew Bailey revealed last week he is putting more emphasis on indicators such as S&P Global's purchasing managers' index, warning that 'we have had more volatile, short-run GDP numbers of late'. However, BOE watchers caution against repeating the error made after the 2016 Brexit referendum, when officials eased policy in response to a sharp downturn registered in surveys. The conflicting signals threaten to muddy the waters at a time when the BOE is deciding how much more it can cut rates, as it weighs a fresh uptick in inflation against concerns over the economy and US President Donald Trump's trade war. Official figures show GDP growth picking up strongly in the first quarter to 0.7 per cent – the strongest performance in a year. Yet the growth signal from the Purchasing Managers' Indexes (PMIs), when an average is taken over the quarter, shows a more stable but stagnant picture – a view that the BOE believes is more indicative of the economy's underlying state. The index showed virtually zero growth in the first quarter. It then dropped into contractionary territory in April as businesses baulked at Trump's tariffs before rebounding to a flat reading in May. 'The challenge we have at the moment is that the forward looking evidence on activity in the economy, so the surveys, are nothing like as strong as that,' Bailey told Parliament's Treasury Committee last week. He called the gap a 'disjoint' and said that BOE staff believe the private-sector surveys are a better predictor of the economy's future than the previous GDP figure. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Bailey is at risk of repeating the same error made after the Brexit referendum, of taking a weak PMI as strong evidence of actual growth, when it proved to be very misleading,' said Robert Wood, chief UK economist at Pantheon Macroeconomics. 'There is strong evidence that the PMI is far too pessimistic about growth when uncertainty rises because the qualitative nature of the survey means that it captures sentiment rather than actual growth. The same will very likely apply to Bailey's visits to firms.' The economy grew by 1.9 per cent in 2016, in line with the average of the previous six years – despite the political upheaval caused by Britain's vote to leave the European Union. While the official data for the first quarter was likely boosted by temporary factors as manufacturers rushed to get ahead of US tariffs, there were also signs of strength in services, the largest part of the UK economy. Government data have been under suspicion amid a series of statistical flaws primarily affecting the labour market data, but also covering estimates of GDP. One concern is whether they are correctly adjusting for seasonal shifts in economic output. 'There's also some evidence to suggest that the GDP data – especially the like-for-like services PMI equivalent component – has been exhibiting some strong seasonality since the pandemic, which is not evident in the PMI,' said Chris Williamson, chief business economist at S&P Global Market Intelligence. The Office for National Statistics dispute this is the case and found little evidence of this effect when it ran detailed testing on the possibility of residual seasonality last month. Economists say the PMIs also have drawbacks, particularly given they do not include certain sectors, such as retail, and government activity. 'But the surveys do capture around 80 per cent of private sector economic output, reflecting spending by both businesses and households, which is what is of primary concern to both policymakers and investors,' said Williamson. The PMI and other business and consumer surveys have also tended to drop sharply in response to political news. Brexit, Liz Truss' calamitous mini-budget in 2022 and Labour's first budget all triggered downturns that did not coincide with significant changes in the economic fundamentals in official data, such as GDP and unemployment. Research by Bloomberg Economics showed that a spike in uncertainty doesn't always result in a big near-term hit for the UK economy. Chief UK economist Dan Hanson said history shows that a spike in policy uncertainty measures 'are not as well correlated with GDP growth as indicators of financial market volatility or survey measures that capture perceptions about the economic outlook.' However, the PMI did align with the downturn seen in official data in the second half of 2023 when the cost-of-living crisis tipped the UK into a mild technical recession. 'The risk is that with different indicators sending different signals on demand, it takes longer for the BOE to understand the forces driving in the economy,' said Ruth Gregory, deputy chief economist at Capital Economics. BLOOMBERG
Yahoo
24-03-2025
- Business
- Yahoo
Week ahead: Global business activity data to offer clues on economic trajectory
Last week, global stock markets came under pressure as major central banks expressed concerns over growth and inflation, driven by Trump's tariffs. Investors will now turn their attention to manufacturing and services Purchasing Managers' Indexes (PMIs) for insights into the economic trajectory. Additionally, the EU summit on Ukraine aid and the bloc's role in peace negotiations will be a key event for European equities. Inflation data from Australia, the UK, Japan, and several European economies will also be closely watched as the global trade war intensifies. A series of flash manufacturing and services PMIs for March from major economies will be released by S&P Global on Monday. These indices provide key insights into economic health by measuring activity across sectors based on new orders, employment, and business confidence. A reading above 50 signals expansion, while a figure below 50 suggests contraction. Since Russia's invasion of Ukraine in 2022, surging energy prices have fuelled inflation and led to rapidly rising interest rates, significantly slowing global manufacturing activity. The EU has been particularly impacted by macroeconomic headwinds, with its manufacturing sector in decline since mid-2022. Related Eurozone consumer confidence falls more than expected in March Lengthy trade wars could cut global investment by one-tenth, warn economists In February, the eurozone's manufacturing PMI improved to 47.6 from 46.6 in January, marking the mildest contraction since early 2023. Germany, France, Italy, and Austria all recorded a slower pace of decline, while business confidence rose to a three-year high, likely due to falling interest rates and China's economic recovery. However, Trump's recently imposed 25% tariffs on steel and aluminium imports could place fresh pressure on the sector. This week, the focus will be on data from Germany and France, where February's manufacturing PMIs were revised higher to 46.5 and 45.8, respectively, though both remained in deep contraction. The data is expected to show further improvement in March. Conversely, the eurozone's services PMI has been expanding for three consecutive months, though growth slowed in February as new business fell. The index stood at 50.6 last month, down from 51.3 in January. Related Euronext CEO: 'There is a massive migration of investment from the US to Europe' In France, the services PMI contracted for a sixth straight month, with output constrained by weak demand, shrinking customer bases, and broader economic fragility. In contrast, Germany's services sector expanded for a third consecutive month. Consensus forecasts suggest German services PMI will rise further to 52.3 in March. In the UK, February's manufacturing PMI remained in contraction at 46.9 for the fifth consecutive month, with March's data expected at 47.3. Meanwhile, services PMI edged up to 51, staying below 52 for the past four months as firms curtailed spending and investment due to economic uncertainty. The services index is expected to remain in modest expansion. In the US, manufacturing PMI climbed to 52.7 in February, reflecting accelerated growth partly due to 'advanced purchases in anticipation of potential price increases and supply disruptions linked to expected tariff impositions.' However, services PMI fell sharply to 51 from 52.9 in January, weighed down by economic uncertainty. Market forecasts place March's manufacturing and services PMIs at 51.9 and 51.2, respectively. Key inflation data this week includes the US Personal Consumption Expenditures (PCE) index, the UK and Australia's monthly Consumer Price Index (CPI), Japan's Tokyo core CPI, and preliminary CPI figures from France and Spain. The US PCE, the Federal Reserve's preferred inflation gauge, is critical for monetary policy decisions. In January, core PCE slowed to 2.6% year-on-year, down from 2.9% in December. Related Barclays Europe CEO on what Trump's tariffs could do to the EU economy However, the Fed raised its median core PCE forecast for 2025 to 2.8% from 2.5%, citing 'increased uncertainty around the economic outlook.' Despite this, Fed Chair Powell described tariff-driven inflation as 'transitory' and downplayed recession risks. A higher-than-expected reading could sustain pressure on US stock markets and fuel further sell-offs. In the UK, inflation accelerated to 3% in January, the highest since March 2024, prompting the Bank of England to maintain its policy rate at 4.5% last week. Annual inflation is expected to cool slightly to 2.9% in February. Investors will also scrutinise the UK government's budget plan, set to be released on Wednesday. Spain's annual inflation is projected to ease to 2.7% in March from 3% in February—the highest level since June. By contrast, France's inflation was confirmed at 0.8% in February, the lowest in four years, with expectations of a slight increase this month. Sign in to access your portfolio
