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Gulf Today
10 hours ago
- Business
- Gulf Today
Thailand cuts key rate to near 3-year low as growth sputters
Thailand's central bank lowered its policy rate to a near three-year low on Wednesday to boost a slowing economy grappling with US tariffs, falling prices and weak foreign tourist arrivals, with further policy easing seen later this year. As widely expected, the monetary committee unanimously cut the one-day repurchase rate by 25 basis points to 1.50%, the lowest since late 2022. It was the fourth reduction in 10 months. The economy was expected to expand this year and next, close to earlier assessments of 2.3% and 1.7%, respectively, but US trade policies would exacerbate structural problems and weaken competitiveness, with small businesses especially vulnerable, the Bank of Thailand said. 'The committee views that monetary policy should be accommodative going forward to support the economy,' it said. This year's growth forecast has some upside from a surge in exports, assistant governor Sakkapop Panyanukul told a press conference after Wednesday's decision. Exports, a key growth driver, grew 15% annually in first six months of 2025 as shippers raced to beat US tariffs, but higher US levies on most trading partners went into effect on August 7, with those on Thai imports set at 19%. The economy will slow in the second half, although there is little chance of a technical recession - or two consecutive quarterly contractions, Sakkapop added. The central bank is ready to ease further if the economy faces severe shocks, he said. 'Weak economic growth remains the main reason for expecting more easing,' said Gareth Leather, senior Asia economist at Capital Economics, said in a note, predicting a further 50 basis-point cuts by the end of the year. Southeast Asia's second-largest economy also has struggled with weak consumption and high household debt, with analysts expecting rate reductions at reviews in October and December. Wednesday's meeting was the last for Governor Sethaput Suthiwartnarueput. New Governor Vitai Ratanakorn, widely seen as dovish, will take over in October, and he has said rate cuts will support growth. 'Led by the new BoT Governor, we expect the BoT to deepen its easing cycle further, cutting the policy rate to 1.00% by 1Q 2026,' HSBC economist Aris Dacanay said in a note. Kobsidthi Silpachai, head of Capital Markets Research at Kasikornbank, expects a further cut in December. Sakkapop also said that the central bank will ensure that the baht currency moves in line with economic fundamentals. The baht reversed course to fall 0.1% after the announcement, while Thai stocks extended gains after the decision. Finance Minister Pichai Chunhavajira said the rate cut will boost liquidity and help exporters by weakening the baht, which has firmed more than 6% against a softening US dollar so far this year. In June, the BOT predicted 2025 economic growth of 2.3%, with export growth of 4%, after factoring in US tariff rates of 18%. The economy expanded 2.5% last year, lagging peers. Reuters
Yahoo
2 days ago
- Business
- Yahoo
Posthaste: Casualties of the tariff war are showing up on both sides of the border, say economists
We're about six months into Donald Trump's tariff war with no endgame in sight. U.S. Treasury Secretary Scott Bessent told Nikkei Asia earlier this week that the United States expects to largely complete trade negotiations by the end of October. In the meantime, global trade is slowing, businesses remain locked in uncertainty and the economic damages are mounting in both the U.S. and Canada, say economists. With U.S. tariffs running at between 15 and 25 per cent in most economies, Capital Economics expects global trade to slow significantly over the next two years. They see real world goods trade slowing from 2.4 per cent in 2024 to about 2 per cent this year and 1 per cent in 2026. That's assuming a 15 per cent tariff, but with current policies putting the tariff rate at about 17 per cent the hit to global trade could be even greater, they said. Sectoral tariffs on such things as pharmaceutical goods would add more pressure. Closer to home, casualties of the trade war are showing up on both sides of the U.S.-Canada border, say economists with BMO Capital Markets. In the United States, the strain on the economy that was first seen in 'soft data' like consumer sentiment, is now showing up in the hard data, said BMO senior economist Sal Guatieri. The weaker-than-expected jobs numbers that led Trump to fire the commissioner of the Bureau of Labor Statistics this month is just one example. Overall the pace of the U.S. economy is slowing and BMO expects that under an effective tariff rate of about 18 per cent, gross domestic product will lose a full percentage point of growth this year. These duties will bring in almost $400 billion in annual revenue for the government, but will increasingly be borne by consumers. Businesses have so far been reluctant to pass on the added costs but they can't absorb big losses forever, said Guatieri. BMO expects U.S. GDP growth to come in at about half of last year's rate at 1.5 per cent. In Canada, the tariff regime has been made more manageable thanks to exemptions under the Canada-United-States-Mexico Agreement, which is why the pressure is on to maintain this deal when it comes up for review. 'If the U.S. were to walk away from the deal after providing six months' notice, Canada's economy could face a deep downturn,' he said. As it is, deferred business investment and a drop in exports of steel, aluminum and autos, which face their own stiff tariffs, will likely cause the economy to contract in the second quarter. BMO does not think we are headed for a technical recession, but growth will slow to 1.3 per cent this year and 1.4 per cent next. The unemployment rate is expected to climb to 7.3 per cent by the end of the year. to get Posthaste delivered straight to your inbox. Canadians continue to give travel to the United States the big thumbs-down. Return trips by Canadian residents from the U.S. by road fell almost 37 per cent in July from a year ago, Statistics Canada said Monday. Return trips by air from the States fell 25.8 per cent. Many Canadians are boycotting the U.S. because of anger over the tariff war and comments by President Donald Trump about Canada becoming the 51st state. Others are concerned Canadians visiting the U.S. could get caught up in Trump's immigration crackdown. Hudson's Bay and B.C. billionaire Ruby Liu have until today to file court documents responding to landlords and one of the department store's leading lenders who want the retailer to end a deal to sell 25 of its leases to Liu. Today's Data: United States consumer price index, NFIB Small Business Optimism, Canada building permits Earnings: CAE Inc., Cineplex Inc., Peyto Exploration & Development, Superior Plus Corp. Canada could be trade winner as U.S. tariffs undershoot global competitors by wide margin, says report Financial market expects Bank of Canada interest rate to fall to 2.25% by year-end Trump put a tariff on gold — or did he? What you need to know about the bullion confusion Underwater on your home? Selling now should be your last resort. In his return to the Financial Post, real estate columnist Garry Marr looks at what a homeowner who bought at the top of the pandemic peak should do in a market that has finally come off the boil. Read more Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@ with your contact info and the gist of your problem and we'll find some experts to help you out while writing a Family Finance story about it (we'll keep your name out of it, of course). McLister on mortgages Want to learn more about mortgages? Mortgage strategist Robert McLister's Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won't want to miss. Plus check his mortgage rate page for Canada's lowest national mortgage rates, updated daily. Financial Post on YouTube Visit the Financial Post's YouTube channel for interviews with Canada's leading experts in business, economics, housing, the energy sector and more. Today's Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg. Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@ Trump hiked Canada's tariff rate to 35%, but just who's paying it remains a mystery Canada could be trade winner as U.S. tariffs undershoot global competitors by wide margin Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Herald Scotland
5 days ago
- Business
- The Herald Scotland
Will Trump's axing of labor statistics chief taint jobs data?
These experts cite three reasons Trump administration officials are not likely to manipulate the statistics for political reasons: There's too much data underlying the most publicized jobs figures; broadly comparable numbers are published in other reports; and there are disincentives for chicanery. "I think it would be pretty hard to revise any statistics" based on politics "or try to fudge the numbers somehow," said Sara Estep, an economist at the left-leaning Center for American progress. Still, Estep and other experts say the trustworthiness of the data is being called into question - a development that itself could have a negative impact on the economy and markets - and outright attempts to massage the numbers aren't out of the realm of possibility. "The concern is that this could mark the start of a slippery slope toward greater White House influence over economic statistics, which in a worst-case scenario might involve censoring, reengineering, or suspending official releases like payrolls or CPI (inflation) to serve the Trump administration's agenda," Capital Economics wrote in a note to clients. A White House spokesperson didn't immediately return an email message seeking comment. But on "Meet the Press" on Aug. 3, Kevin Hassett, director of the National Economic Council, told moderator Kristin Welker that Trump simply wants to make the jobs report more transparent. "If there are big changes and big revisions - we expect more big revisions for the jobs data in September, for example - then we want to know why. We want people to explain it to us," Hassett said. What was the jobs report for July? On Aug. 1, Trump fired Erika McEntarfer, the commissioner of the Bureau of Labor Statistics, after the agency reported a disappointing 73,000 job gains in July and, more significantly, revised down payroll additions for May and June by a historically massive 258,000 positions. Economists said the large revisions can be explained by small business' unusually low response rates to BLS' initial surveys as they grapple with cost increases from Trump's double-digit tariffs on imports and the effects of the duties on business confidence and hiring. But on Truth Social, Trump said without providing evidence that "today's Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad," noting McEntarfer was appointed by former Democratic President Joe Biden. After firing McEntarfer, he appointed William Wiatrowskias interim BLS head and said he would name a permanent replacement within days. William Beach, McEntarfer's predecessor as BLS chief and a Trump appointee, said it's "impossible" for a BLS commissioner to manipulate the jobs data. He added that person doesn't see the report until the numbers are loaded and readied for distribution the Wednesday before its release the first Friday of the month. Keith Hall, who was appointed BLS commissioner by former President George W. Bush and served from 2008 to 2011, told USA TODAY that too many career, nonpartisan civil servants have a hand in drafting the report for the data to be distorted. About 40 people, both Republicans and Democrats, see the final jobs number shortly before publication, Beach previously said. Is Trump trying to control independent federal agencies? Yet, economists worry Trump could test that presumption. His removal of McEntarfer marks his latest challenge to federal agencies whose independence is critical for a smoothly functioning economy. For months, Trump has tried to badger Federal Reserve Chair Jerome Powell into lowering interest rates and has threatened to fire him, though experts say Powell can't be removed without cause. Economists say the jobs report is considered the global gold standard for accurate and unbiased economic data, providing the best broad snapshot of the U.S. economy in close-to-real time and helping guide the actions of investors, corporations, governments and consumers. Trump's removal of McEntarfer "presents risks to the conduct of monetary policy, to financial stability, and to the economic outlook," JPMorgan Chase economist Michael Feroli wrote in a note to clients. He added "the risk of politicizing the data collection process should not be overlooked." Here's why some experts say they're not worried about the reliability of the jobs numbers: Other federal jobs measures If a BLS commissioner or other key employees finagled the jobs numbers, "discrepancies would quickly emerge in other metrics like jobless claims, which are reported at the state level and [are] less prone to federal influence," Capital Economics said in its research note. Initial unemployment insurance applications provide a reliable gauge of layoffs. And the jobs report represents the net total of all layoffs, hiring, quits, retirements and job switches across the economy. Private jobs reports Even if the administration "brought all major statistical agencies under tight control, economists and investors could still infer the true state of the economy from private sources," Capital Economics said. Those include the ADP employment report and job postings from Indeed, the leading job search site. "Any tampering with official data would likely be exposed sooner or later and would be politically damaging once uncovered," Capital Economics said. Markets are watching - and reacting If evidence emerged that the administration was fiddling with the jobs data, investors likely would demand a higher return for holding assets as such as U.S. Treasuries, pushing up interest rates, Capital Economics said. Trump has fervently advocated for lower rates. The research firm added that "the administration has some inclination to avoid upsetting markets - especially when it leads to higher bond yields and increased debt-servicing costs." Trump tends to push the envelope but not rip it up Trump has shown a propensity to push the boundaries in his efforts to achieve his goals "without clearly crossing" the line, Capital Economics said. For example, he has stopped short of firing the Fed's Powell. "This fits a broader pattern of the administration applying maximum pressure to get its way on issues from deportations to federal layoffs, without openly defying the courts," Capital Economics wrote. Lots of people compile the jobs report The jobs report is like a massive puzzle put together by hundreds of employees and the pieces need to fit. If the final numbers were fudged, employees who worked on inputs to those numbers would realize that and speak up, Hall said. "All of the data, detail and all of the industry statistics need to add up," he said. The underlying jobs data BLS is famously transparent and provides the underlying data behind all its jobs numbers, Estep said. For example, the unemployment rate is based on a survey of 60,000 households, and the agency has their individual responses, she said. At the same time, here's why some experts are still worried: Private jobs data relies on federal numbers Although ADP and other private firms provide jobs data, they're typically "benchmarked to the federal data, as private sector data are very rarely nationally representative," Feroli said. ADP, for instance, relies on the federal jobs report from two months earlier to estimate last month's numbers. The risk of political meddling In the Meet the Press interview, Hassett told Welker, "The president wants his own people there [at BLS] so that when we see the numbers, they're more transparent and more reliable." Said Estep: "I would keep an eye out" for the potential replacement of some longterm public servants with political appointees at BLS and other agencies. "Are they somehow installing more plans for the politicization of these statistical agencies?" Estep asked. The data may be accurate, but is it trustworthy? Even if it's unlikely the data will be manipulated, "it may be less trusted," Estep said, noting that could affect markets and the behavior of companies and consumers. "The trust component, that's really scary." In an opinion piece posted on David Madland, senior fellow at the Center for American progress, wrote: "Government data analysts will do their best to produce credible reports, and much of what they publish will be accurate, but these workers will be increasingly subject to political pressures, or outright meddling. "Reputational damage has already been done - and the decline in trust carries real consequences."
Asahi Shimbun
6 days ago
- Business
- Asahi Shimbun
China's exports and imports picked up in July, helped by the pause in Trump's higher tariffs
A man walks by the capital city tallest skyscraper China Zun Tower and office buildings at the central business district during lunch break hour in Beijing on Aug. 7. (AP Photo) BANGKOK--China's exports surged 7.2% in July from a year earlier while its imports grew at the fastest pace in a year, as businesses rushed to take advantage of a truce in President Donald Trump' s trade war with Beijing. However, analysts said the improvement also reflected a low base for comparison in July 2024. Exports to the United States sank nearly 22% year-on-year, while imports from America fell almost 19%. But exports to Africa and Southeast Asia surged at double-digit rates as Chinese businesses diverted sales to other markets. Tariffs on Chinese goods are being considered separately from the new higher tariffs that took effect on Thursday for dozens of U.S. trading partners. China's global trade surplus for 2025 rose to $683.5 billion by the end of July, nearly a third higher than the surplus for the same period last year. The data showed that China's surplus in July was $98.2 billion, while its exports to the United States were $23.7 billion than its imports of U.S. goods. U.S. imports from China are subject to tariffs of at least 30%, with some products facing much higher import duties. Trump earlier had ordered still higher rates of up to 245%, and Beijing responded in kind, but the two sides agreed to pause those to allow time for trade talks. It's unclear if the truce will be extended beyond an Aug. 12 deadline following the latest round of negotiations last week in Sweden. The Trump administration has also raised tariffs on imports from countries other than China that it suspects of being 'transshipped' via other countries. For example, the import duty on Vietnam's exports to the U.S. now stands at 20%. For transshipped goods, it's 40%. 'With the temporary boost to demand from the U.S.-China trade truce already fading and tariffs on shipments rerouted via other countries now rising, exports look set to remain under pressure in the near term,' Zichun Huang of Capital Economics said in a report. Economists had been expecting China's dollar-denominated exports to grow less than 6% in annual terms in July, on a par with June's 5.8% rate. But improved trade with the rest of the world has helped offset the impact of Trump's trade war. Imports rose 4.1% last month from a year earlier, the most since July 2024, with higher shipments of crude oil, copper and soybeans. China's exports of rare earths that are vital for making many high-tech and other products and Trump has made ensuring U.S. access to such vital minerals a key part of trade negotiations, leading Beijing to promise to loosen some controls. In July, China's exports of rare earths fell 17.6%, compared with a nearly 50% fall the month before. In January-July, its rare earths exports fell 24.2% in dollar terms although they rose more than 13 percent by volume. Exports of vehicles, fertilizer, ships and auto parts also saw strong growth.
Yahoo
6 days ago
- Business
- Yahoo
China's exports grow despite tariff turmoil as trade pivots to Africa
Despite Washington and Beijing locking horns many times this year, China's economy has remained mostly unshaken. According to data released on Thursday, the nation's exports surged 7.2% in July from a year earlier, while its imports grew at the fastest pace in a year. This came as businesses rushed to take advantage of a lull in President Donald Trump's trade war with Beijing, after both sides agreed to temporarily reduce tariffs until 12 August. The US tariff on Chinese goods had previously reached 145%. Analysts nonetheless added that the improvement looked particularly positive because exports were weak in July 2024. China redirects trade flows to Africa Exports to the United States sank nearly 22% year-on-year, while imports from America fell almost 19%. But exports to Africa and Southeast Asia surged at double-digit rates as Chinese businesses diverted sales to other markets. China has become Africa's largest trading partner, with bilateral trade worth around €141bn in the first half of this year, according to the Chinese General Administration of Customs. For now, US tariffs on Chinese goods are being considered separately from the new higher tariffs that took effect today for dozens of US trading partners. Related China announces child subsidy programme as births hit historic lows 'Liberation Day' 2.0: What's coming and who will feel it the most China's global trade surplus for 2025 rose to $683.5bn or around €586bn by the end of July, nearly a third higher than the surplus for the same period last year. The data showed that China's surplus in July was €84.3bn, while its exports to the United States were €20.3bn more than its imports of US goods. 'With the temporary boost to demand from the US-China trade truce already fading and tariffs on shipments rerouted via other countries now rising, exports look set to remain under pressure in the near term,' Zichun Huang of Capital Economics said in a report. The economy is holding up, for now Economists had been expecting China's dollar-denominated exports to grow less than 6% in annual terms in July, on a par with June's 5.8% rate. But improved trade with the rest of the world has helped offset the impact of Trump's trade war. Imports rose 4.1% last month from a year earlier, the most since July 2024, with higher shipments of crude oil, copper and soybeans. China's exports of rare earths that are vital for making many high-tech and other products and Trump has made ensuring US access to such vital minerals a key part of trade negotiations, leading Beijing to promise to loosen some controls. In July, China's exports of rare earths fell 17.6%, compared with a nearly 50% fall the month before. From January to July, its rare earths exports fell 24.2% in dollar terms, although they rose more than 13% by volume. Exports of vehicles, fertiliser, ships and auto parts also saw strong growth. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
