Latest news with #economic growth
Reuters
4 hours ago
- Business
- Reuters
Russian central bank slashes key rate by 200 bps in biggest cut since May 2022
MOSCOW, July 25 (Reuters) - The Russian central bank cut its key interest rate by 200 basis points to 18% on Friday, hoping to revive lending and boost flagging economic growth after stubbornly high inflation showed signs of easing. The move is the biggest decrease since May 2022, when the central bank cut by 300 bps as the economy was recovering from the shock from Western sanctions imposed following the launch of Russia's military action in Ukraine. The latest reduction was in line with a Reuters poll of 27 economists, and comes after Russian business leaders and some government officials complained that high interest rates were strangling the economy. The central bank had raised rates substantially since July 2023 in order to deal with the effects of an overheating economy caused by a surge in military spending. Russia's economy minister said last month the country was on the brink of recession as a result. Alongside its sharp rate cut, the central bank lowered its 2025 inflation forecast to between 6% and 7% from between 7% and 8% and said inflationary pressures were declining faster than previously forecast. The bank said it would keep monetary conditions as tight as necessary to return inflation to the target of 4% in 2026. "We are on the path to returning inflation to target, but this path has not yet been completed," central bank governor Elvira Nabiullina said at a news conference following the rate decision. "Returning to the target... implies a stable consolidation of inflation at a low level not only in actual data, but also in the perception of people and businesses," she said. Russia's consumer price index fell by 0.05% in the latest week, marking weekly deflation for the first time since September 2024, while annualized inflation slowed to 9.17% from its peak of 10.3% in March. The central bank maintained its 2025 gross domestic product growth forecast at between 1% and 2% and said it saw some softening in Russia's tight labour market. The economy grew by 4.3% last year. The central bank cut its forecast for the average oil price in 2025 to $55 per barrel from $60 per barrel, implying a fall in state budget revenues, but Nabiullina said she did not expect any surprises from the budget. The Russian economy will face another test in early September when a 50-day deadline set by U.S. President Donald Trump for Russia to show progress toward peace in Ukraine expires, with potential new U.S. sanctions against buyers of Russian oil to follow. Nabiullina said the bank will work to ensure the financial sector's resilience to Western sanctions does not weaken. "We see that indeed the financial sector is one of the main targets for sanctions, and these sanctions are being tightened," Nabiullina said. The bank was under intense pressure from the business community to start easing after it hiked the key rate to the highest level since the early 2000s last year. Business leaders complained that at such a rate, investment no longer made sense. Nabiullina said that such pressure does the economy a disservice by creating the false impression that the central bank has been forced to cave in when cutting rates, which in turn fuels inflationary expectations "Such attempts to exert pressure would, in effect, result in higher interest rates," she warned. President Vladimir Putin has backed the policy of the central bank, but warned it not to cool the economy too much. High interest rates have hit Russia's construction and coal sectors and led to a rise in bad debt for Russian banks. Speaking just before the rate decision on Friday, Deputy Prime Minister Marat Khusnullin, who oversees the construction sector, said that a 400 bps cut was more desirable, indicating that many officials in Russia want the central bank to cut more. The rouble, which rallied by 45% against the U.S. dollar earlier this year in part due to the high key rate, began to weaken ahead of the expected rate cut and touched the 80 mark against the dollar on Friday, a near-six week low. The stronger rouble has aided the central bank in fighting inflation by making imported goods cheaper with some bankers alleging that supporting the rouble was a deliberate policy by the central bank.
Reuters
a day ago
- Business
- Reuters
Ukraine's central bank keeps rates steady, sees economy slowing in 2025
KYIV, July 24 (Reuters) - Ukraine's central bank on Thursday left its key interest rate steady at 15.5% for the third consecutive meeting as inflation is expected to continue to ease, but it said that wartime risks will constrain economic growth. In a statement, it said Ukraine's economic growth would slow to 2.1% this year compared with 2.9% in 2024. The central bank previously predicted 2025 economic growth at 3.1% but cut its forecast due to more intense Russian attacks in recent months. Governor Andriy Pyshnyi said that inflation had started to decline as expected in June and would continue to slow significantly by the end of the year. "Holding the key policy rate steady at 15.5% is an important prerequisite for a sustainable slowdown of inflation toward its 5% target," Pyshnyi told a news briefing. The central bank expects inflation to reach 9.7% at the end of this year and to slow to 6.6% in 2026 and to 5% in 2027.
Zawya
a day ago
- Business
- Zawya
Savills: Riyadh Office Market holds firm as rents and occupier demand continue to rise
Riyadh's office market continued to perform strongly in Q2 2025, underpinned by a stable economic outlook, high business confidence, and growing interest from international occupiers, according to the latest research from Savills. The Kingdom's economy is forecast to expand by 3.5% in 2025, driven by a 4.9% rise in the non-oil sector, a clear indicator of the ongoing success of Saudi Arabia's diversification agenda. Business sentiment remained upbeat, with the Purchasing Managers Index (PMI) climbing to 57.2 in June, its highest reading since May 2011, signalling strong private sector activity and employment growth. Foreign direct investment also continued on an upward trajectory, reaching SAR 22.2 billion in Q1 2025, up from SAR 15.5 billion during the same period last year. Within the office market, Grade A occupancy stood firm at 98%, reflecting sustained tenant demand amidst a limited supply pipeline. Average rents rose slightly by 0.75% on a quarterly basis but recorded a 10% increase year-on-year. Zone C, home to emerging hubs such as Riyadh Front. Digital City, and Laysen Valley, led annual rental growth at 15%, while Zone A, which includes prime locations such as Olaya, KAFD, and Kingdom Centre, followed closely with nearly 11%. This highlights the continued appeal for both well-established commercial districts and newer, strategically located developments. Chris Chambers, Head of Transactional Services in KSA, commented: 'We're seeing strong expansion-driven activity across sectors, particularly within banking, financial services and insurance (BFSI) accounting for 50% of transactions this quarter. Legal and pharmaceutical firms each contributed a further 25% underscoring the depth and diversity of demand. Notably, leasing interest is increasingly shifting towards larger spaces, with half of all enquiries targeting units above 1,000 sq m.' Multinational interest in Riyadh remains high. By mid-2025, over 660 global companies had been licensed to establish regional headquarters in the city, already surpassing the Vision 2030 target of 500. Notable new entrants in Q2 include BNY Mellon, ASPEN, Globant, and London Business School. Enquiry data from Savills shows that 46% of leasing interest this quarter originated from the US and UK, reflecting strong global confidence in the Saudi capital. Sector-wise, the highest levels of leasing enquiries came from banking and financial services, technology, media and telecoms (TMT), and engineering and manufacturing, highlighting Riyadh's broadening commercial base and appeal to knowledge-driven industries. The capital's infrastructure push also continues to support its commercial growth. The Riyadh Metro saw over 25 million passengers in Q1 2025, and the addition of new stations is expected to further enhance accessibility to key areas such as the King Abdullah Financial District (KAFD) and Olaya. Looking ahead, while rental growth is likely to remain firm in the near term due to ongoing demand and limited supply, the pressure is expected to ease slightly towards the end of 2026, with more than 900,000 sq m of new Grade A stock scheduled to be delivered through major developments such as Diriyah Gate and Prince Mohammed bin Salman Nonprofit City (Misk). For further insights and detailed analysis, download the full Riyadh Office Market in Minutes Q2 2025 report from here. About Savills Middle East: Savills plc is a global real estate services provider listed on the London Stock Exchange. With a presence in the Middle East for over 40 years, Savills offers an extensive range of specialist advisory, management and transactional services across the United Arab Emirates, Oman, Bahrain, Egypt, and Saudi Arabia. Expertise includes property management, residential and commercial agency services, property and business assets valuation, and investment and development advisory. Originally founded in the UK in 1855, Savills has an international network of over 700 offices and associates employing over 40,000 people across the Americas, UK, Europe, Asia Pacific, Africa, and the Middle East.
Malay Mail
a day ago
- Business
- Malay Mail
Malaysia's semiconductor exports remain resilient, grow 15.7pc in H1 2025, says Tengku Zafrul
PETALING JAYA, July 24 — Malaysia's semiconductor exports remained resilient, growing 15.7 per cent in the first six months of this year alone (1H 2025), outpacing overall export growth of 3.8 per cent, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz. He said that every RM1 spent triggers over RM2 in direct output across the economy through supply chains, supporting sectors, and household incomes. 'In total, the industry generated RM4.9 trillion in economic output last year, underscoring its role as a national multiplier,' he said in his remarks at the ASEAN Semiconductor Summit (ASEMIS) 2025, today. Tengku Zafrul said that, amid global headwinds, the 1H 2025 performance clearly shows Malaysia's relevance and competitiveness in the global semiconductor space. He said that what is equally important is that this growth is spreading -- from Penang and Selangor to Kedah, Negeri Sembilan, Perak and Sarawak. Moreover, he said it is not just lifting big players, but also nearly 1,000 small and medium enterprises that form the bedrock of its semiconductor ecosystem. 'What makes this industry so vital is also its far-reaching impact,' he said. — Bernama
Bloomberg
2 days ago
- Business
- Bloomberg
RBNZ Says Ready to Cut Rates Further If Price Outlook Eases
By Updated on Save New Zealand's central bank is ready to cut interest rates further if the outlook for price pressures continues to soften as expected, chief economist Paul Conway said, warning that US tariffs are likely to damp economic growth and inflation. While the Reserve Bank held the Official Cash Rate at 3.25% at its last meeting on July 9, 'we see scope to lower it further if medium-term inflation pressures keep evolving as we anticipate,' Conway said in a speech Thursday in Wellington. 'We are watching closely, we are constantly updating our analysis and we are ready to adjust the Official Cash Rate as needed.'
