Latest news with #stateownedbanks
South China Morning Post
23-05-2025
- Business
- South China Morning Post
‘A bit lost': China's savers search for options after deposit rate cuts
After a landmark decision by China's biggest banks this week to slash one-year deposit rates below 1 per cent for the first time, households across the country are grappling with a pressing question: where should they park their money? Advertisement The dilemma arose for risk-averse savers after six major state-owned lenders and leading joint-stock bank China Merchants Bank (CMB) announced on Monday they would cut their one-year fixed deposit rate to 0.95 per cent, eliminating what was once a safe, if modest, source of passive income. Smaller banks have followed suit, trimming rates across maturities, albeit to a smaller degree. Their one-year rate stands at 1.15 per cent, while three-year rates are at 1.3 per cent. For millions of Chinese families, the decline in deposit yields makes an already challenging financial landscape all the more slippery. Households are wracked with economic uncertainty while facing weak income prospects and a lack of attractive investment options. 'Since the rate cuts, we've seen a surge in clients asking what to do next. Many lament that the days of relying on bank deposits for steady returns are over,' said Liu, a client manager at a Shanghai branch of CMB who requested partial anonymity. Advertisement The move, the seventh such adjustment among China's leading banks since September 2022, officially ushered the country's deposit rates into the sub-1 per cent era.
The National
15-05-2025
- Business
- The National
Falling oil prices have taken toll on Iraqi economic activity, IMF says
A highly uncertain global environment, falling oil prices and acute financing pressures are taking their toll on Iraqi economic activity, exacerbating the country's existing vulnerabilities, the International Monetary Fund said on Thursday. The fund called for urgent measures to preserve fiscal and external stability, it said in a statement issued at the end of a mission to Iraq. 'The current account is expected to weaken considerably in 2025 primarily due to declining oil export revenues. The deterioration in the external position is projected to weigh on foreign reserves,' said the IMF. Iraq, Opec's second-largest oil producer, can contain the fiscal deficit by mobilising non-oil tax revenues and reining in the public wage bill, the Washington-based fund recommended. Other initiatives Baghdad can take include completing the restructuring of state-owned banks, promoting private sector growth by reforming the labour market, improving the business environment, enhancing governance and fighting corruption, the fund said. 'Building on recent progress, the Central Bank of Iraq should continue modernising the banking system and supporting private banks in expanding their corresponding banking relationships,' the fund said. The IMF mission, led by Jean-Guillaume Poulain, met with Iraqi authorities in Amman and Baghdad from May 4 to 13. Iraq has endured decades of conflict − a devastating war with Iran in the 1980s, the First Gulf War in 1990 and then the 2003 US-led invasion. This was followed by years of internal conflict, then battles with insurgents and years of bombings. The conflicts, which have killed millions of Iraqis, showed no signs of slowing until Iraq removed the ISIS threat from most parts of the country in 2017, and initiated a political process to restructure its governance and plot the country's recovery. Following 13.8 per cent growth in 2023, Iraq's non-oil gross domestic product is expected to have moderated to 2.5 per cent in 2024, driven by a slowdown in public investment and in the services sector, as well as a weaker trade balance, the IMF said. Iraq's agriculture, manufacturing and construction sectors remained resilient. However, the decline in oil production weighed on overall growth, which contracted by 2.3 per cent for the year. Inflation dropped to 2.7 per cent by the end of 2024, amid lower food price inflation and liquidity absorption from the central bank. The 2024 fiscal deficit is estimated at 4.2 per cent of GDP, compared to 1.1 per cent in 2023, reflecting 'rising spending on wages and salaries' and energy purchases, the IMF said. On the external front, the current account surplus narrowed from 7.5 per cent to 2 per cent of GDP, due to a surge in goods imports. However, external buffers remained strong, with reserves at $100.3 billion at the end of last year, covering more than 12 months of imports, the fund added. 'Iraq's non-oil GDP is projected to slow down to 1 per cent this year as the impact of falling oil prices and financing constraints weigh on government spending and consumer sentiment,' the fund said. The IMF said current public employment policies and resulting wage costs are unsustainable given Iraq's low non-oil tax base. Dependence on oil revenues has worsened, and the oil price required to balance the budget increased to around $84 per barrel in 2024, up from $54 in 2020, the statement outlined. The fund recommended that in the short term, the authorities should review current and capital spending plans for this year and limit or postpone all non-essential expenditure. There may also be scope to increase non-oil revenues by revising customs duties as well as introducing or raising excise taxes. The authorities should also explore options to diversify the creditors' base for increasing financing availability, it added. There is scope to gradually reform personal income tax by limiting exemptions and increasing rates, it suggested. The fund also recommended curbing current expenditures, particularly through comprehensive wage bill reforms, limiting mandatory hiring and adopting attrition rule to yield significant savings. It is urgent to reform the public pension system through raising the retirement age, it added. The IMF mission also asked Iraq to finalise the restructuring plan for state-owned banks 'without delay'. The mission estimated that a 'comprehensive set of reforms' covering the labour market, business regulation, the financial sector and governance could double Iraq's non-oil potential GDP growth over the medium term.
CNA
15-05-2025
- Business
- CNA
Thailand's growth to slow over next 2 years due to tariffs, minister says
BANGKOK: Thailand's economic growth may slow down over the next two years due to steep US tariffs, but state-owned banks will provide support to exporters and supply chain businesses affected, its finance minister said on Thursday (May 15). "Within the next two years, we should see quite a few stumbles. The ones who will stumble are likely to be in the export sector," minister Pichai Chunhavajira said at a meeting with state-owned banks. However, Thailand is not expected to see a greater tariff impact than other countries, Pichai said. Thailand faces a 36 per cent US tariff if a reduction cannot be negotiated with Washington before a moratorium expires in July. The United States has set a 10 per cent tariff for most nations while the moratorium is in place. Thailand has sent a trade proposal to the United States as part of its efforts to avoid the high tariffs. In a statement, Pichai said the government plans soft loans worth 100 billion baht (US$3 billion) to support impacted supply chain businesses and exporters of goods to the United States, as well as those affected by increased imports from China. State-owned banks will also prepare measures to boost the agricultural and property sectors, as well as offering interest rate reductions for those impacted.
