Latest news with #geopoliticaltensions
South China Morning Post
2 days ago
- Business
- South China Morning Post
Hong Kong regains favour as companies and investors turn to China and yuan: Deutsche Bank
Hong Kong's corporate activity and yuan-driven business have been revitalised as global market participants strengthen ties to China's economy amid tariffs and geopolitical tensions, according to a senior executive at Deutsche Bank. Companies and investors have increased their exposure to China and hedged against the US dollar as they adjusted their supply chains and portfolios amid market volatility, said Ole Matthiessen, head of corporate banking for Asia-Pacific, Middle East and Africa, during a briefing in Hong Kong last week. 'We are seeing market participants across the corporate and institutional sectors thinking about hedging against risks' amid once-in-a-decade volatility in the foreign-exchange market, said Singapore-based Matthiessen, who is also the global head of cash management for the German lender. This volatility included significant US dollar depreciation against Asian currencies and fluctuating interest rates influenced by the economic outlook, tariffs and geopolitical tensions, he said. 'As part of that thinking, the discussion of the [yuan] as a world currency has resurfaced and grown stronger as a trend,' he said. Corporate and individual clients were keen to 'adopt a currency to keep their wealth for value preservation and risk-management reasons'. The trend was amplified as Chinese firms accelerated their global expansion plans, further leveraging Hong Kong's financial and investment resources, he added. Matthiessen said many corporate clients that previously retreated from Hong Kong in favour of Singapore were reconsidering their dual-hub structures. These companies – in industries such as logistics and consumer products that relied on procurement and supply chains in China – recognised 'Hong Kong's value as a connected global gateway and its direct links to mainland China', he said. 'It is a healthy trend that underscores the importance of Hong Kong in the global arena for export and import activities, particularly as mainland Chinese companies pursue their global ambitions.'
Arabian Business
3 days ago
- Business
- Arabian Business
Global economy set to weaken amid rising uncertainty, WEF economists warn
Chief economists from leading global institutions have unanimously warned that worldwide economic prospects are set to deteriorate considerably for the remainder of 2025, amid 'extraordinary' levels of uncertainty driven by geopolitical tensions and policy volatility, according to a World Economic Forum report released on Thursday. The May 2025 Chief Economists Outlook, based on a survey conducted in early April among top economists, revealed that 82 per cent characterised current uncertainty levels as 'very high' – with nearly half expecting these elevated levels to persist or increase further over the next year. 'The May 2025 edition of the Chief Economists Outlook is published at a time of extraordinary volatility and uncertainty,' the WEF report stated. 'Since the beginning of the year, the global economic outlook has darkened.' Trade policy has emerged as the central driver of economic turbulence, with 97 per cent of surveyed economists identifying it as the area subject to the highest level of uncertainty globally, followed by monetary policy (49 per cent) and fiscal policy (35 per cent). A significant shift in perspective occurred since the previous survey in November 2024, with 79 per cent of chief economists now viewing recent changes to U.S. policy as part of a long-term structural shift rather than a short-term disruption, up from 61 per cent previously. 'Trade-related uncertainty in the past three months has been higher than at any time since records began in 1960,' the report stated, noting that April 2025 levels exceeded even those seen during the COVID-19 pandemic. Among the key concerns highlighted was the impact of rising tariffs, with 77 per cent of respondents expecting higher inflation and 89 per cent anticipating stagnation or decline in global trade volumes for the remainder of 2025. The regional outlook showed marked divergences, with the US economic trajectory showing the most pronounced deterioration. Nearly four out of five chief economists anticipate weak (69 per cent) or very weak (8 per cent) growth for the U.S. economy for the remainder of the year, a significant downgrade from previous expectations of moderate to strong growth. 'According to early official estimates, in the first quarter, real GDP decreased at an annual rate of 0.3 per cent,' the report noted about the U.S. economy. European prospects showed modest signs of improvement, although from a weak base after years of lacklustre growth. Half of the economists still expect growth to remain weak, but increasing fiscal flexibility, particularly in Germany, was cited as a potential driver for broader European growth. In China, while 69 per cent expect moderate growth, economists were split on whether the country would reach its 5 per cent GDP growth target for 2025, with the IMF having recently revised its forecast downward to 4 per cent. Defence spending emerged as a significant economic factor, reflecting growing geopolitical concerns. The survey found that most chief economists expect increased public borrowing (86 per cent) to finance higher military expenditure, while many also anticipate cuts to other public investment (56 per cent) and services (47 per cent). 'Shifts in the global security architecture have caused the steepest year-on-year rise in global military spending since at least the end of the Cold War,' the report said. Despite these challenges, artificial intelligence offers a potential bright spot. While only 45 per cent of chief economists expect AI to become commercially disruptive this year, a significant proportion (46 per cent) anticipate it will add up to five percentage points to global GDP over the next decade, with another 35 per cent expecting gains of 5-10 percentage points. The labour market impact of AI remains uncertain, with 47 per cent of economists forecasting net job losses over the next decade, compared to 19 per cent who predict net job gains. In response to these complex challenges, businesses are adapting rapidly. All surveyed economists (100 per cent) expect companies to reorganise sourcing and logistics to reduce exposure to tariffs or export controls, while 87 per cent anticipate businesses will delay strategic decisions and investments due to heightened uncertainty. 'At a time of profound disruption, organizations can position themselves for resilience and expansion by aligning technological innovation with a clear understanding of the broader economic landscape,' the report concluded. The survey, conducted between April 3-17, captured economists' views during a period of particularly acute trade uncertainty before several major powers announced temporary pauses to planned tariff increases in May.
Reuters
5 days ago
- Business
- Reuters
Wages in Singapore grew 3.2% in 2024, fewer firms planning increase in 2025
SINGAPORE, May 28 (Reuters) - Real wages in Singapore grew 3.2% in 2024 compared to 0.4% in 2023, government data on Wednesday showed. However, the share of firms planning wage increases going forward has declined to 22% in March compared to 32% in December 2024 because of geopolitical tensions and global trade uncertainties, according to a survey by the manpower ministry.
Khaleej Times
22-05-2025
- Business
- Khaleej Times
Dubai: Gold prices rise above Dh400 per gram again, hit 2-week high
Gold hit a two-week high on Thursday as the price rose above Dh400 per gram in Dubai, pushing the global rate of the precious metal above $3,340 per ounce due to US debt fears. At the opening of the markets in Dubai on Thursday, 24 karat was trading at Dh402.5 per gram. Among the other variants, 22 karat, 21 karat and 18 karat were trading at Dh372.5, Dh357.0 and Dh306 per gram, respectively. Spot gold was trading at $3,338.82 per ounce, up 0.74 per cent. The US Treasury Department saw soft demand for a $16-billion sale of 20-year bonds on Wednesday, which is weighing not just the dollar but Wall Street as well, with traders already jittery after Moody's cut the US triple-A credit rating last week. George Khoury, global head of research and education at CFI, said the reason behind sustained gold purchases is largely tied to rising global debt levels and ongoing geopolitical tensions. 'These tensions have persisted since the start of the Russia-Ukraine conflict and have extended into the broader Middle East region. These factors are currently exerting a strong influence on gold prices. Additionally, we should consider the recent weakness in the US dollar, about a month ago, which led to a rise in gold prices. This was followed by a strengthening of the dollar, which in turn contributed to a decline in gold,' he said. He pointed out that major central banks, investment banks and hedge funds have forecasted potential gold price targets as high as $3,500, $3,750, or even $4,000. 'These projections, while optimistic, remain within the realm of possibility.'
Arab News
15-05-2025
- Business
- Arab News
Indian travel firms report drop in Turkey, Azerbaijan bookings over Pakistan support
BENGALURU: Indians are cancelling holidays in popular resorts in Turkey and Azerbaijan after the countries supported Pakistan during its recent conflict with New Delhi, two booking firms said. Ties between India and Pakistan nosedived after a deadly attack in Indian-administered Kashmir last month that New Delhi said was backed by Islamabad. Pakistan denied involvement, but intense fighting broke out when India struck what it said were "terrorist camps" in Pakistan last week. They agreed a ceasefire on Saturday which has largely held. Turkey and Azerbaijan, popular budget holiday destinations for Indians, issued statements backing Islamabad after India's strikes. "Bookings for Azerbaijan and Turkey decreasing by 60% (over the last week) while cancellations have surged by 250% during the same period," a spokesperson for MakeMyTrip said. EaseMyTrip's Chief Executive Officer, Rikant Pittie, said the platform had seen a 22% rise in cancellations for Turkey and 30% for Azerbaijan "due to recent geopolitical tensions.' Travellers had switched to Georgia, Serbia, Greece, Thailand and Vietnam, he added. Another ticketing platform, ixigo, earlier said in a post on X that it would be suspending flight and hotel bookings for Turkey, Azerbaijan and China. EaseMyTrip's founder and chairman Nishant Pitti said in a post on X that 287,000 Indians visited Turkey last year and 243,000 visited Azerbaijan. "When these nations openly support Pakistan, should we fuel their tourism and their economies?" Pitti said.
