Latest news with #domestic demand
Reuters
2 days ago
- Business
- Reuters
South Korea economy likely returned to growth in Q2: Reuters poll
BENGALURU, July 22 (Reuters) - South Korea's economy likely returned to growth last quarter, supported by a modest rebound in exports and a gradual recovery in domestic demand, a Reuters poll of economists found. After contracting 0.2% in the January-March period due to sluggish consumption and weak exports, Asia's fourth-largest economy grew a seasonally adjusted 0.5% in the April-June quarter, according to the median forecast of 22 economists. If realised, growth would align with the Bank of Korea's projection, opens new tab made in May. On a year-on-year basis, gross domestic product (GDP) was forecast to have expanded 0.4% in the second quarter, following zero growth in the first three months of the year, based on the median estimate from 23 economists polled July 15-21. "South Korea's second-quarter GDP is expected to rebound modestly," said Min Joo Kang, economist at ING. "Consumption showed signs of recovery, but a more meaningful improvement is likely in the third quarter, once the government's consumption voucher programme takes effect. To cushion the economy against weak domestic demand and the potential fallout from U.S. tariffs, the government approved a supplementary budget of 13.8 trillion won ($9.9 billion) in May, followed by a larger 31.8 trillion won package in early July that includes giving all local citizens spending vouchers. Exports rose 4.3% in June after a 1.3% decline in May, driven by strong global demand for semiconductors. However, exports to the United States fell for a third consecutive month, slipping 0.5%, while shipments to China dropped 2.7%, marking the second straight monthly decline. "Although exports have been volatile they posted a gain, supported by strong orders for semiconductors, vessels and pharmaceutical goods," Kang added. "Construction, however, likely remained a drag on overall growth." South Korea, currently in trade negotiations with Washington, risks facing a 25% tariff on its exports to the United States if no deal is reached before the August 1 deadline. Industry Minister Kim Jung-kwan said on Monday talks were in a "critical phase" with a wide range of outcomes still possible. "The South Korean government is working very hard to secure a deal, but whether the deal comes before August 1 is highly uncertain," said Stephen Lee, chief economist at Meritz Securities. "If the two countries are willing to link everything to the deal - from reducing nontariff barriers, buying more U.S. produced goods, our involvement in Alaska projects and defense spending - the negotiations would need more time." Earlier this month the Bank of Korea held interest rates steady, but a majority of board members signaled the likelihood of a rate cut within the next three months, citing 'significant' economic uncertainty stemming from potential U.S. tariffs. A separate Reuters poll showed economists have lowered their 2025 growth forecast to 0.9%, down from 1.3% projected in April, bringing it in line with the BOK's latest estimate of 0.8%. ($1 = 1,387.8 won)
Yahoo
4 days ago
- Business
- Yahoo
China Defends Growth Model, Plans Consumption as Greater Driver
(Bloomberg) -- China's trade with the world is within reasonable bounds and the nation isn't out to dominate global markets, a senior official said, pointing to figures showing domestic consumption is driving economic growth. The Dutch Intersection Is Coming to Save Your Life Mumbai Facelift Is Inspired by 200-Year-Old New York Blueprint How San Jose's Mayor Is Working to Build an AI Capital Milan Corruption Probe Casts Shadow Over City's Property Boom LA Homelessness Drops for Second Year 'Most of China's production is intended to meet domestic demand,' Vice Finance Minister Liao Min said in an interview Friday near Durban, South Africa, where he was attending a gathering of Group of 20 policymakers. 'When there's demand from abroad, China exports accordingly. This does not mean, however, that China is trying to dominate every market.' Liao also hailed the latest Chinese GDP growth figures as helping to contribute to the world economy at a decisive moment. Economists have marked down their projections for global growth this year due to the onslaught of tariff increases by President Donald Trump. Figures this week showed China's expansion at 5.3% for the first half of the year — 'in line with expectations,' Liao said. 'China's certainty and stability are the greatest contributions it makes to the world today, because what the global economy needs most right now is stability and certainty,' Liao said. 'We are steadily advancing toward an economic model driven by consumption, while at the same time maintaining a relatively balanced foreign trade.' The latest China GDP figures showed exports supported growth in the most recent quarter. The country logged a goods-trade surplus of about $586 billion in the first half of the year — due in part to exporters front-loading shipments on tariff fears. While export momentum is expected to cool in coming months, some economists still see a record full-year surplus above $1 trillion. Liao highlighted that, over the past four years, consumption has driven an average of 56.2% of China's GDP gains. That's 8.6 percentage points higher than during 2016-2020 period, he said. Domestic demand as a whole accounted for 86.4% of China's growth, the vice minister said. He also said China's current-account surplus — the broadest measure of trade, as it includes services and some financial transactions — was about 2.2% last year, a level 'recognized globally as reasonable' and indicating the share of its shipments worldwide is 'not excessively high.' China's critics have used other metrics. A top US Treasury official last year cited figures showing China's manufacturing-goods trade surplus approaching 2% of world GDP, roughly twice the share of Japan's in the early 1990s. Current Treasury Secretary Scott Bessent has repeatedly called China 'the most imbalanced economy in the history of the world.' Speaking at a congressional hearing last month, Bessent charged Beijing with 'trying to export their way out' of the nation's domestic real estate slump. Liao's comments come ahead of an expected fresh round of trade talks with the US in the coming weeks. He didn't offer any specific comment on Bessent's criticism in the interview Friday. The vice finance chief has been a key member of the country's team of negotiators that reached a trade-war truce with their American counterparts in Geneva, and again in London, earlier this year. Consumption Aid Liao also said that looking at a particular sector can give a flawed perspective of China's trade. 'Just because China holds a large market share in certain products doesn't mean it should be accused of overcapacity,' he said. 'Such claims are oversimplifications and fail to capture the full reality.' The huge uncertainty surrounding Trump's levies on Chinese goods has added urgency in Beijing to shift its growth toward domestic consumption. The government doubled the amount of ultra-long special sovereign bond issuance this year, aimed at subsidizing consumer purchases of electronic products, home appliances and cars. That took the total to 300 billion yuan ($41.8 billion). More than half of the allowance was used in the first half, incentivizing sales of about 10 times that amount. For the longer term, the authorities will seek to expand service industries and promote the green and digital sectors, with a goal of propelling economic transformation — beefing up consumer spending power as jobs and incomes rise, Liao said. Meanwhile, the government will continue strengthening social safety nets, including pensions to ensure stable growth in consumer spending over the long run, he said. Liao spoke with Bloomberg after the conclusion of the G-20 meeting of finance ministers and central bank chiefs that resulted in a joint communique. He hailed the adoption of that statement, saying it showcased the effectiveness of the group's finance track, despite different viewpoints. G-20 Communique Delivers Rare Show of Unity Amid Trump Trade War 'It sends a strong message that countries are committed to better communication, closer coordination and working together in a spirit of unity,' Liao said, adding that China will continue to support multilateralism and the G-20. 'The G-20 itself was created as a platform for the international community to respond to crises. At a time when the global economy is facing so much uncertainty and so many challenges, the G-20 should play an even greater role,' Liao said. A Rebel Army Is Building a Rare-Earth Empire on China's Border What the Tough Job Market for New College Grads Says About the Economy How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All Godzilla Conquered Japan. Now Its Owner Plots a Global Takeover Why Access to Running Water Is a Luxury in Wealthy US Cities ©2025 Bloomberg L.P.
Malay Mail
5 days ago
- Business
- Malay Mail
Malaysia's economy seen growing 4.5pc in Q2 2025 on strong domestic demand
KUALA LUMPUR, July 18 — Malaysia's economy is forecast to grow by 4.5 per cent in the second quarter of 2025 (2Q 2025) based on advance estimates, outpacing the 4.4 per cent expansion in the previous quarter. The growth is expected to be driven by robust domestic demand amidst global headwinds, according to the Department of Statistics Malaysia (DOSM). In a statement today, DOSM said growth momentum was sustained in April and May, with a stronger performance anticipated in June. 'Overall, the economy is estimated to have grown moderately by 4.4 per cent in the first half of 2025,' it said. — Bernama MORE TO COME
