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First Post
3 hours ago
- Business
- First Post
Trump's 25% tariff on India could drag down GDP growth by 50-60 basis points, say analysts
US President Donald Trumps' 25% tariff on India could slash India's projected GDP growth by 50-60 basis points, dragging it below the 6%-mark. Currently, the Reserve Bank has projected the GDP growth for this year at 6.5%. read more US President Donald Trump and Prime Minister Narendra Modi shake hands as they attend a joint press conference at the White House in Washington, on, February 13. Reuters US President Donald Trump could deliver a hit of 50-60 basis points to the Indian GDP growth with tariffs and penalties, according to analysts. Trump on Thursday formally imposed 25 per cent tariff on India. He has also previously threatened additional penalties over India's trade with Russia. Previously, the Reserve Bank of India (RBI) had projected the Indian economy to grow at 6.5 per cent in 2025-26. The Union Finance Ministry had projected the economy to grow in the 6.3-6.8 per cent range. STORY CONTINUES BELOW THIS AD With Trump's 25 per cent tariff, and any additional penalties, the GDP growth could fall to 6.1 per cent and even below the 6 per cent-mark, as per analysts. Trump's tariff could slash GDP growth by 50-60 basis points, exports by 12.5% The State Bank of India (SBI) has said that a 20 per cent tariff could slash as much as 50 basis points (0.5 per cent) from India's GDP, according to CNBC-TV18. At 25 per cent tariff, this would mean a cut of around 62 basis points, dragging down India's GDP growth to around 5.87 per cent. The SBI study further said that any 1 per cent rise in tariff may lead to a 0.5 per cent decline in export volumes'. At 25 per cent tariff, this would mean 12.5 per cent decline in export volume. This could have massive implications for the Indian economy as the United States in India's largest export destination. Other analysts said that the tariff's effect could be in the range of 40-50 basis points. ANZ economists Dhiraj Nim and Sanjay Mathur said if 25 per cent tariff remained in place for the remainder of 2025-26, 'it could subtract 40 basis point from GDP growth', according to The Indian Express. Separately, Barclays has projected a hit of 30 basis points and Nomura has projected a hit of 20 basis points. 'Taking into account the sectoral exemptions, we estimate the effective tariff rate (for India) at ~20 per cent. The announced reciprocal tariff rate of 25 per cent, however, may be temporary, and might settle lower, as negotiations will continue after August 1. However, the best-case outcome would still be tariffs in the 15-20 per cent range, which is disappointing, considering India's more advanced stage of negotiations,' noted Nomura, as per Financial Express. STORY CONTINUES BELOW THIS AD
News.com.au
11 hours ago
- Business
- News.com.au
Melbourne house prices: $1m median milestone likely to hit soon
Melbourne's sluggish house prices are on track to skyrocket past $1m, although it's still languishing as one of the nation's most affordable major capitals. PropTrack's Home Price Index report for July, released today, shows the city's typical house value now stands at $983,000, after a $24,000 (2.15 per cent) increase in the past 12 months. Widely-anticipated future Reserve Bank rate cuts and strong population growth are tipped to fuel a strengthening market, and a similar jump in the coming 12 months would take the city past the $1m mark. Separate data set from the Real Estate Institute of Victoria put the city's median house price at $1,004,500 in 2021, before it later decreased as interest rates rose. Their data shows it has yet to return to seven-figure territory. PropTrack senior economist Anne Flaherty said Melbourne property prices had experienced a reversal in fortunes across the past six months. 'We do think that the median price per house in Greater Melbourne will hit that $1m mark,' Ms Flaherty said. Further interest rate cuts would make borrowing more affordable, meaning buyers could spend more on a house, she added. 'We would expect following an August rate cut that has the potential to put some momentum for price growth,' Ms Flaherty said. 'And then of course if you look at just population growth trends, population growth is still very strong which is going to underpin housing demand.' According to PropTrack, Melbourne's median house price has never before hit $1m. Its highest-ever value was $992,000, in February 2022. At the moment, Melbourne's typical house value is Australia's third-most affordable, behind Sydney on $1.564m and Brisbane at $1.067m. And Melbourne's $609,000 typical unit price, including apartments, is the fourth cheapest in the nation, trailing Sydney on $860,000, Brisbane's $715,000 and Adelaide's $632,000. Regional Victoria's median house price rose to $588,000 in July, while units increased to $414,000. With Australian Bureau of Statistics data released yesterday showing the number of new houses being approved across Victoria grew just 1.4 per cent in June and the number of units plunged 6.1 per cent, Ms Flaherty warned the state was falling short of the number needed to meet the state's population growth. 'In the 2024 financial year there was an 18 per cent shortfall across Victoria in the number of new homes built compared to what was needed to accommodate growth,' she added. Melbourne-based buyers agency Empower Wealth research and business analyst, Kevin Au, echoed these concerns. 'Despite the federal government's ambitious target of 1.2 million new dwellings over five years, Victoria's share of roughly 60,000 new homes per year may not be enough to ease supply constraints,' Mr Au said. 'High construction costs and labour shortages continue to hamper new development, keeping pressure on both prices and rental markets.' But he said this would continue to drive demand for rental homes. Property Investment Professionals of Australia chair Lachlan Vidler said the state's property market was regaining confidence particularly in Melbourne's outer suburbs and regional centres like Geelong. 'Strong population growth, low vacancy rates and improving affordability are driving renewed interest despite ongoing supply challenges,' Mr Vidler said. AUSTRALIA'S PROPERTY PRICES SNAPSHOT JULY 2025 Houses: Sydney. Median price: $1.564m. Percentage increase or decrease across the past 12 months: 3.41% Brisbane $1.067m 7.77% Melbourne $983,000 2.15% Perth $926,000 7.25% Adelaide 916,000 9.48% Units: Sydney. Median price: $860,000 Percentage increase or decrease across the past 12 months: 3.21% Brisbane $715,000 13% Adelaide $632,000 8.39% Melbourne $609,000 -0.56% Perth $584,000 11.41% Top five Victorian growth regions (for all dwellings combined, including apartments, units and houses): Victoria's north west. Median price: $375,000 Percentage increase or decrease across the past 12 months: 5.03% Ballarat $529,000 4.32% Shepparton $469,000 4.12% Bendigo $593,000 3.94% Melbourne's north west $739,000 3.44% Source: PropTrack Home Price Index July 2025.
Mail & Guardian
15 hours ago
- Business
- Mail & Guardian
Reserve Bank cuts interest rates to 7% in widely expected decision
Reserve Bank governor Lesetja Kganyago The Governor Thursday's cut was the second consecutive one this year. The announcement was delivered against the backdrop of global uncertainty as the tariffs announced by US President Donald Trump are set to kick in on 1 August. South Africa will be faced with a 'The United States paused tariff increases in April, but that pause expires tomorrow, and many countries do not yet have new trade deals,' Kganyago said. Global oil prices have also fluctuated due to the conflict in the Middle East, while the tariffs will affect trade costs with other countries. Economists have also said it will affect local growth but the governor said the global economy has shown 'resilience' in the face of these tariffs. 'To date, global economic activity has been broadly resilient to these stresses. The world growth outlook is largely unchanged from our last meeting. But there are risks that permanently higher tariffs, or adverse geopolitical developments, could cause more disruption to the global economy than we have seen so far this year.' The Reserve Bank revised its economic growth prospects for South Africa downward on the back of the tariffs, and the slow growth reported during the first quarter of 2025, which was only 0.1%, and in line with its earlier expectations. 'Along with an assumption of higher US tariffs on South Africa, this has caused us to mark down our 2025 growth forecast. The economy's underlying growth trend remains low, mainly due to persistent supply-side problems, for instance in logistics,' Kganyago said, adding that high uncertainty and low business confidence was also affecting productivity in the country. The Reserve Bank is, however, cautiously positive about growth picking up in the coming years, supported by ongoing structural reforms, he added. South Africa's 'The South African Reserve Bank has been more cautious than some of its global peers, but this cut suggests that inflation is now firmly anchored and opens the door for a more flexible approach going forward,' said Maarten Ackerman, the chief economist at Citadel. 'This move signals that the [South African Reserve Bank] is comfortable with the inflation trajectory and is willing to provide support to the economy, as long as price stability remains intact.' The Reserve Bank has also been considering scenarios where the 'It is important to sustain this progress and to minimise uncertainty about the longer-term objectives of monetary policy,' Kganyago noted. 'Therefore, the [monetary policy committee] now prefers inflation to settle at 3%. In line with this, we have decided to aim for the bottom of our inflation target range, of 3 to 6%.' 'We welcome the recent moderation in inflation expectations and would like to see expectations fall further. This would expand policy space and make our framework more robust to shocks. We will use forecasts with a 3% inflation anchor at future meetings.' Kganyago told a media briefing that the central bank had not received confirmation from the finance ministry on the decision to lower the target range. 'The South African Reserve Bank will also continue working with the national treasury to complete target reform and achieve permanently low inflation,' he added. Ackerman said there was a probability of at least one more interest cut before the end of the year. 'Beyond that, we expect the Reserve Bank to pause and reassess the data, particularly inflation trends and global developments,' he said.
Courier-Mail
15 hours ago
- Business
- Courier-Mail
Cairns home prices hit new record high
Cairns has defied gravity by smashing out a new home price record, despite affordability constraints slowing the pace of growth. The latest PropTrack Home Price Index, released Friday, reveals the median home price (houses and units) rose to $585,000 — up 2.2 per cent compared to three months ago. And, Cairns has recorded home price growth of 10 per cent over the past 12 months. RELATED: Million-dollar territory: Queensland leads home price growth Across regional Queensland, home prices were up 0.6 per cent over the month, hitting a new peak, and they have grown nearly 10 per cent in the past financial year. Townsville was the state's strongest performer over the past 12 months, with its median home price climbing 16.7 per cent to $551,000, followed by Mackay at $557,000 (up 14.5 per cent). Home prices in regional Queensland have almost doubled over the past five years, rising a whopping 90 per cent. REA Group senior economist Anne Flaherty said home prices continued to rise across Queensland last month, despite the Reserve Bank's surprise decision to keep interest rates on hold in July. MORE: Major risk: Rate cut pressure mounts on RBA 'While the number of homes for sale has slowed over winter, buyer demand remains strong, with auction clearance rates sitting at the highest level in more than two years,' Ms Flaherty said. 'Home prices are expected to break into new territory later this year, with further interest rate cuts expected to add momentum to price growth.' One of the biggest sales in Cairns in July was that of a beachfront home in Clifton Beach. The four-bedroom house at 147 Arlington Esplanade sold for $2.5m through Craig Gillard of LJ Hooker. A four-bedroom house with 13m of water frontage in Bluewater Harbour at 20 Brindabella Quay, Trinity Park, also sold for $1.5m. MORE: Shock as lenders slash rates to lowest level in 2 years off cycle And, in Freshwater, a four-bedroom house on 800 sqm fetched $1.32m. Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said regional Queensland markets that were once undervalued, like Cairns, had recorded some of the 'most exceptional growth'. 'This strong growth in traditionally slower moving markets is a sign of Queensland's expanding demand footprint and deeper decentralisation,' Ms Mercorella said. 'This is being fuelled by both owner-occupiers and investors seeking value and growth opportunities.' But she acknowledged a growing affordability issue had emerged. 'The pace at which prices have raced away has left many prospective buyers feeling left behind and locked out,' Ms Mercorella said. 'If we want to ensure sustainable price growth and ensure future generations the same opportunity to own a home, housing policy must be squarely focused on supply.' Nationally, home prices also hit a record high of $827,000 in July, though the pace of growth has slowed. Prices were up 0.3 per cent for the month.
The Citizen
15 hours ago
- Business
- The Citizen
Rate cut a welcome boost for consumers and homeownership
Today's announcement that the Reserve Bank has decided to cut the repo rate by another 25bps to 7.00% (from 7.25%), and the prime rate to 10.50% (from 10.75% ) is welcome news for the economy and property market, says Samuel Seeff, chairperson of the Seeff Property Group. This is the third interest rate cut this year (fifth since September last year). Seeff says it is the correct decision given that inflation (at 3% for May) is below the Bank's target range, and the currency has been stable, trading at times below R18/USD. While this cut brings welcome relief for consumers by reducing borrowing costs and putting more money back into their pockets to spend in the economy, Seeff says it is still not enough. More needs to be done to really give the economy the rocket boost that it needs. Nonetheless, the rate cut will make home loans more affordable, and property buyers will find it slightly easier to qualify, thus opening more doors to homeownership. The total rate cuts since September mean that the interest rate will now be 1.25% lower compared to last year. The repayment on a bond of R1m (over 20-years) will therefore now be reduced by around R853 per month. We would therefore certainly encourage buyers to take advantage of the opportunities in the market, Seeff says further. Higher demand and improved house price appreciation at around 3.7% nationally (topping inflation for the first time in two years) also provides incentive for sellers, especially since many areas are in need of more property listings. While the rate cuts have been well received, Seeff says the economy and property market have not yet felt any notable impact from the rate cuts. The first quarter GDP growth was disappointing. After an initial surge, the overall property transaction volumes for the first half of this year are about 16% below the same time last year. Bolder rate cuts are needed. Since the interest rate (even after the latest cut) is still higher compared to January 2020 before the onset of the Covid-pandemic, we continue to urge the Bank to step up with more cuts now while inflation is contained, and the currency stable. As a result of the 25bps rate cut, mortgage repayments will reduce by: R750 000 bond – from R7,614 to R7,488 – saving R126 R900 000 bond – from R9,137 to R8,985 – saving R152 R1 000 000 bond – from R10,152 to R9,984 – saving R168 R1 500 000 bond – from R15,228 to R14,976 – saving R252 R2 000 000 bond – from R20,305 to R19,968 – saving R337 R2 500 000 bond – from R25,381 to R24,960 – saving R421 R3 000 000 bond – from R30,457 to R29,951 – saving R506 R5 000 000 bond – from R50,761 to R49,919 – saving R842 (Based on a 20-year repayment period at the prime rate) Issued by Gina Meintjes
