Latest news with #YunLiu
Business Times
5 days ago
- Business
- Business Times
Vietnam's robust domestic activity in July buoys growth amid trade strains
[HO CHI MINH CITY] Vietnam's domestic economic activity was buoyant in July, supported by robust spending and investment, while exports braced for a potential slowdown in the coming months as higher US tariffs kick in on Aug 7 . Estimates from the Vietnamese government's statistics agency (NSO) on Wednesday (Aug 6) pointed to retail sales having grown by 9.2 per cent in July, accelerating from the eight-month low of 8.3 per cent in June. In the first seven months of 2025, retail activity expanded by 9.3 per cent year on year, stronger than the year-ago period's 8.9 per cent. This underscores 'resilient private spending, driven in part by strong real wages', noted Adam Ahmad Samdin, economist at Oxford Economics. Credit growth also hit a 10-year high – 9.64 per cent – in the year to Jul 28, indicating robust economic activity, he added. Vietnam's central bank on Tuesday (Aug 5) even urged lenders to further slash interest rates and keep deposit rates stable to boost lending and support the country's growth target. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The Vietnamese government is targeting economic growth of 8.3 to 8.5 per cent in 2025, up from 7.09 per cent in 2024. On the production front, soft data from S&P Global's latest purchasing managers' survey for July showed that strengthening domestic demand drove new orders, which expanded for the first time in four months, growing at the fastest pace since November 2024. While new export orders remained in contraction for the ninth consecutive month due to the US tariff hikes, manufacturers secured sufficient domestic business to return total new orders to growth. Foreign and government investments have also accelerated, supporting the country's growth outlook this year. In a recent note, Maybank analysts, citing the improved business landscape resulting from reduced red tape and a more predictable legal environment, wrote: 'The steady rollout of private-sector reforms will cushion the headwinds to external trade from the US tariffs by promoting domestic investment and enhancing competitiveness for foreign direct investment (FDI).' Public investment disbursement in the first seven months came in at 388 trillion dong (S$19 billion), almost 40 per cent of the sum for the full-year plan. This is a marked increase from the 27.8 per cent for the corresponding period in 2024. Disbursed FDI from January to July also hit the highest level for a seven-month period in at least nine years, rising by 8.4 per cent from the year before, to US$13.6 billion. FDI pledges, which indicate future inflows, grew 27.3 per cent year on year to hit US$24.09 billion. Given that the 20 per cent US tariff on Vietnam is now broadly on par with the 19 per cent imposed on other key Asean exporters, 'Vietnam's comparative advantage as a favoured investment destination remains', said Yun Liu, Asean economist at HSBC. Export growth likely to ease Exports in July continued to grow strongly, at 16 per cent year on year, bringing the year-to-July turnover to US$42.27 billion. This was driven largely by shipments in two sectors – that for computers and electronics, and for machinery and equipment. In the first seven months, Vietnam recorded a trade surplus of US$10.2 billion, with exports and imports expanding by 14.8 per cent and 17.9 per cent, respectively. In line with the robust export performance, industrial production rose by 8.5 per cent from the same period last year. 'We expect export momentum to slow, given that the tariff-pause is slated to end on Aug 7,' said Oxford Economics' Samdin. He pointed out that front-loaded orders had temporarily boosted exports ahead of the tariff deadline, so he is expecting a payback effect in the coming period. Uncertainties also persist, largely due to the lack of clarity on the definition of 'transhipment' – such goods will be subject to a higher 40 per cent tariff imposed by the US – as well as upcoming sector-specific levies. HSBC's Liu added: 'Downside risks to (Vietnam's) growth have not faded in this challenging trade environment, as the situation remains fluid.'
The Star
03-07-2025
- Business
- The Star
Malaysia rate cut bets grow as tariff talks weigh on outlook
Expectations are growing for Malaysia's central bank to cut interest rates at its policy meeting on July 9, which is also the deadline for countries to reach trade deals with the US to avert swingeing tariffs. Bank Negara Malaysia is expected to cut the overnight policy rate (OPR) next week by 25 basis points to 2.75% to preemptively support growth, analysts at HSBC Holdings Plc and CIMB Group Holdings Bhd . said in separate reports. Traders are pricing in a 40% chance of a rate cut within the next three months, according to swaps data compiled by Bloomberg. "We expect the cut to materialise largely as a means of pre-empting a potential slowdown in domestic demand,' analysts Yun Liu and Madhurima Nag from HSBC wrote in a June 25 note. Private consumption may be impacted by the expansion of the sales and service tax and the government's plans to cut subsidies for the country's cheapest and most popular gasoline, RON95, according to the HSBC analysts. The impact of the latter should be limited, however, as authorities aim to keep the majority of the population shielded, they added. The government has already flagged it plans to revise down its 4.5%-5.5% growth target this year. Malaysia's exports contracted by 1.1% in May, with CIMB's Azri Azhar and Michelle Chia citing that decline as evidence of persistent tariff uncertainties, soft global demand and weakening trade sentiment. It's unclear when Malaysia will reach a trade agreement with the US. Southeast Asian neighbour Vietnam has reached an accord in which its goods will be subject to a 20% tariff, according to US President Donald Trump. Credit momentum is also showing signs of broad-based moderation, while signs of softness in private consumption are becoming more evident, the CIMB analysts wrote in a July 2 note. These all point to a cut in borrowing costs at the July 9 meeting, they said. To be sure, the central bank may still delay any move. This would imply that additional data may be required, namely the advance gross domestic product figures for the second quarter and trade figures for June and July, according to CIMB. - Bloomberg
Business Times
03-07-2025
- Business
- Business Times
Malaysia rate cut bets grow as tariff talks weigh on outlook
[KUALA LUMPUR] Expectations are growing for Malaysia's central bank to cut interest rates at its policy meeting on Jul 9, which is also the deadline for countries to reach trade deals with the US to avert swingeing tariffs. Bank Negara Malaysia is expected to cut the overnight policy rate next week by 25 basis points to 2.75 per cent to preemptively support growth, analysts at HSBC Holdings and CIMB Group Holdings said in separate reports. Traders are pricing in a 40 per cent chance of a rate cut within the next three months, according to swaps data compiled by Bloomberg. 'We expect the cut to materialise largely as a means of pre-empting a potential slowdown in domestic demand,' analysts Yun Liu and Madhurima Nag from HSBC wrote in a Jun 25 note. Private consumption may be impacted by the expansion of the sales and service tax and the government's plans to cut subsidies for the country's cheapest and most popular petrol, RON95, according to the HSBC analysts. The impact of the latter should be limited, however, as authorities aim to keep the majority of the population shielded, they added. The government has already flagged it plans to revise down its 4.5 to 5.5 per cent growth target this year. Malaysia's exports contracted by 1.1 per cent in May, with CIMB's Azri Azhar and Michelle Chia citing that decline as evidence of persistent tariff uncertainties, soft global demand and weakening trade sentiment. It's unclear when Malaysia will reach a trade agreement with the US. South-east Asian neighbour Vietnam has reached an accord in which its goods will be subject to a 20 per cent tariff, according to US President Donald Trump. Credit momentum is also showing signs of broad-based moderation, while signs of softness in private consumption are becoming more evident, the CIMB analysts wrote in a Jul 2 note. These all point to a cut in borrowing costs at the Jul 9 meeting, they said. To be sure, the central bank may still delay any move. This would imply that additional data may be required, namely the advance gross domestic product figures for the second quarter and trade figures for June and July, according to CIMB. BLOOMBERG
The Star
18-05-2025
- Business
- The Star
Silver lining amid the gloom
MALAYSIA has much to look forward to in 2025 despite global uncertainties. HSBC's Asean economist Yun Liu says she has reduced Malaysia's gross domestic product (GDP) growth rate to 4.2% from 4.8% earlier this year because of external trade volatility. (Malaysia posted a GDP growth of 4.4% for the first quarter).
