Latest news with #ICAEW
BusinessToday
7 hours ago
- Business
- BusinessToday
Malaysia's GDP Growth Forecast To Slow To 4.3%, BNM Expected To Cut OPR: ICAEW Report
FMIP Malaysia's economy is expected to decelerate in 2025 as external challenges mount, according to the latest Southeast Asia Economic Insight Q2 2025 report by the Institute of Chartered Accountants in England and Wales (ICAEW). The report forecasts Malaysia's GDP growth to slow to 4.3% this year from 5.1% in 2024, citing global trade tensions and waning demand from key partners such as the US and China. Despite a strong start to the year, with goods exports surging 26% year-on-year in April, ICAEW cautions that this uptick is largely due to front-loaded shipments to the US ahead of anticipated tariff hikes. Export growth is expected to cool significantly in the second half of the year, after already slowing to just 1.6% year-on-year in Q1 2025, well below the 7.1% average recorded over the previous three quarters. Malaysia's reliance on global trade—especially with the US, which directly or indirectly accounts for over 4% of GDP and 11% of gross exports—makes it vulnerable to tariff risks. While the US has softened its proposed blanket tariff rate on Malaysian imports to 10% from 24%, the measure still poses a threat to exporters. Meanwhile, weaker demand from China, Malaysia's top export destination, adds further pressure. However, ICAEW sees some bright spots supporting Malaysia's economy: Electrical and Electronics (E&E) exports remain robust, rising about 20% year-to-date on sustained global demand, reinforcing Malaysia's key role in the semiconductor supply chain. The tourism sector continues to rebound, with ASEAN tourists—who made up 67% of arrivals in 2024—driving a 17% year-on-year increase in tourism-related services exports in Q1 2025. 'ASEAN's strength lies in its unity,' said Dato' Mohammad Faiz Azmi, Executive Chairman of the Securities Commission Malaysia and ICAEW Council Member. Speaking at the ASEAN Investment Conference 2025 in Kuala Lumpur, he stressed the importance of regional cooperation in navigating global uncertainties. Monetary Easing Expected to Support Domestic Demand With fiscal space limited due to elevated public debt, ICAEW expects Bank Negara Malaysia (BNM) to take the lead in stimulating the economy. Subdued inflation—hovering around 1.5%—has created room for the central bank to cut its Overnight Policy Rate (OPR) by 50 basis points later in 2025. BNM has already adopted a more accommodative tone to counter risks from softening investment and consumer sentiment. The report highlights a broader economic deceleration trend across key indicators from March 2022 to March 2025, including: Slower GDP growth Weakened private consumption Moderated goods and services exports Nonetheless, ICAEW believes Malaysia's economy will stay on track, thanks to timely policy measures and resilient performance in strategic sectors. Singapore and China Also Facing Slowdowns The ICAEW report also provided updates on other major regional economies with Singapore where GDP contracted 0.6% quarter-on-quarter in Q1 2025, dragged by weak manufacturing and wholesale trade. A temporary export surge in April (+25% YoY) has likely delayed a technical recession. Full-year GDP is forecast at 1.8%, down from 4.4% in 2024, with policy buffers helping cushion the slowdown. As for China, GDP growth is projected to slow to 4.4% in 2025 (2024: 5.0%) amid continued weakness in property, investment, and consumption. Trade truce with the US offers short-term relief, but future tariff uncertainty and deflationary pressures persist. ICAEW adds that Southeast Asian economies need to remain agile, cohesive, and proactive in policy responses to maintain resilience and long-term growth. Related
Yahoo
a day ago
- Business
- Yahoo
BoE leaves interest rates on hold at 4.25%
The Bank of England has left interest rates on hold at 4.25%. The Bank's Monetary Policy Committee (MPC) chaired by Bank Governor Andrew Bailey voted by 6 to 3 to leave the cost of borrowing unchanged in a blow to heavily indebted businesses and millions of mortgage borrowers. Three members of the MPC voted to cut rates to 4%. Rates were last cut to their current level in May. Today's decision had been widely expected in the City, particularly after it was revealed yesterday that the rate of inflation only fell slightly to 3.4% in May. However most analysts expect the Bank to make its next move in August with a further quarter point cut to 4% to help boost the UK's anaemic economic growth. That would be the fifth reduction since the Bank started easing interest rates from their peak of 5.25% in July last year. A further reduction to 3.75% is widely expected in November Rates were hiked rapidly by the Bank from December 2021 to August 2023 to get a grip of the rampant inflation unleashed by the ending of Covid restrictions and the energy price spike that followed the full scale Russian invasion of Ukraine. It left millions of homeowners who took out fixed two and five mortgage deals at record low interest rates between 2017 and 2021 facing hugely higher costs when they had to remortgage. Around 1.6 million mortgage deals are set to expire this year, according to trade body UK Finance. Suren Thiru, economics director at accounting body ICAEW , said: 'Keeping interest rates unchanged is a big blow to those people wrestling with high mortgage bills and firms struggling with April's host of major bill rises and tax hikes. 'Though this policy loosening cycle is not yet over, this latest decision is further confirmation that the speed of interest rate cuts remains especially cautious, with policymakers wary over elevated inflation and intensifying international instability. 'While just three MPC members voted to cut rates, an August policy loosening remains probable with the meeting minutes indicating continued concerns over the UK's vulnerability to growing economic and geopolitical headwinds. 'With policymakers facing a difficult combination of deepening global turbulence, uncomfortably high inflation and rising oil prices, future interest rate decisions will be more fraught, particularly if the economy weakens further.' Mark Harris, chief executive of mortgage broker SPF Private Clients, said: 'With only a two-way split in voting this time around - three members voted for a quarter-point reduction while six voted for a hold - this is encouraging, suggesting that another reduction could come at the August meeting. 'However, with the Bank opting for a cautious approach, it has missed a real opportunity to be bold by cutting rates again. This would have sent out a strong message, helping boost the housing market and wider economy, particularly now that the stamp duty concession is no longer available. Paul Noble, CEO of online lender Chetwood Bank, said: 'The MPC's lack of action piles on greater uncertainty for mortgages as well, leaving would-be buyers in the lurch. 'This cautious approach could lead to greater paralysis when what markets need is a catalyst. For savers, the risk is time – it's vital to find to best returns, to stay flexible, and to stop letting handwringing on Threadneedle Street dictate their outcome.' Error in retrieving data Sign in to access your portfolio Error in retrieving data
Muscat Daily
3 days ago
- Business
- Muscat Daily
GCC economic growth projected at 4.4% despite trade tensions
Muscat – GCC economies are set for stronger-than-expected growth this year, despite rising global trade tensions and subdued oil prices, according to the latest ICAEW Economic Insight report for the second quarter, prepared by Oxford Economics. The report highlights upgraded regional forecasts, with the GCC region's GDP now expected to expand by 4.4% in 2025, up from a previous estimate of 4.0%. While global GDP growth has been downgraded to 2.4% – the slowest pace since 2020 – the GCC is bucking the trend. This resilience is being driven by a quicker rollback of OPEC+ production cuts, which has lifted oil sector growth forecasts from 3.2% in March to 4.5%. However, the ICAEW report noted that with Brent crude expected to average $67.30 per barrel in 2025, the GCC faces increasing fiscal pressures. Only Qatar and the UAE are projected to maintain fiscal surpluses in 2025, underscoring the challenge of balancing growth ambitions with budget constraints. The report also stated that the impact of the 10% US tariff on imports from GCC countries is expected to be limited, given the region's relatively low export exposure to the US and the exemption of energy products. 'Non-oil sectors in the GCC are forecast to grow 4.1% this year, supported by strong domestic demand, investment momentum, and diversification initiatives. The region is also well positioned to absorb any trade rebalancing resulting from tariff pressures and geopolitical tensions,' the report said. In a press statement, Hanadi Khalife, Head of Middle East at ICAEW, said, 'The GCC economies are showing remarkable adaptability amid shifting global trade dynamics. Investments in tourism, technology, and infrastructure continue to pay dividends, strengthening resilience and laying the groundwork for long-term growth.' Scott Livermore, ICAEW Economic Adviser and Chief Economist and Managing Director at Oxford Economics Middle East, added, 'We have upgraded our GCC forecast due to faster OPEC+ output increases and sustained non-oil momentum in key economies like Saudi Arabia and the UAE. While uncertainty and trade shifts may place pressure on fiscal policy, the region's two leading economies are expected to continue progressing towards economic diversification and attracting global capital at an accelerated pace.' Saudi Arabia's oil economy is now forecast to grow by 5.2% in 2025, up sharply from 1.9% projected in March, reflecting increased oil output and economic momentum. Production is averaging 9.7mn barrels per day, while non-oil sectors – led by construction and trade -continue to expand. The UAE economy is projected to grow by 5.1% in 2025, driven by a recovery in oil output, a 4.7% rise in non-oil GDP, deepening trade ties, and improved market access. Tourism remains a key driver, with international visitor spending expected to contribute nearly 13% of GDP in 2025.
Daily Tribune
3 days ago
- Business
- Daily Tribune
GCC Surges Ahead Despite Global Slump
The Gulf economies are expected to grow faster than earlier projected, defying a broader global downturn and weak oil prices, according to the latest ICAEW Economic Insight report released on Monday. The Q2 update revises the GCC's 2025 GDP forecast upward to 4.4% from 4.0%, underscoring the region's resilience amid rising trade barriers and fiscal pressures. Prepared by Oxford Economics for ICAEW, the report contrasts the GCC's improved outlook with the downgrade in global GDP growth to 2.4%, the slowest pace since the 2020 pandemic shock. Oil and beyond A key driver behind the upgraded outlook is a faster-than-expected reversal of OPEC+ production cuts, which has lifted oil sector growth projections from 3.2% to 4.5%. However, the Brent crude average for 2025 is still forecast at a modest $67.3 per barrel, limiting fiscal space for several states. Only the UAE and Qatar are projected to maintain surpluses in 2025. Most other member states are likely to face tightening budgets, with Saudi Arabia forecast to run a deficit of 3.4% of GDP as spending outpaces oil revenues. Still, non-oil sectors are holding up strongly across the region, with forecast growth of 4.1% in 2025 driven by domestic demand, investment momentum, and diversification initiatives. The report highlights that the region remains well-positioned to absorb trade rebalances resulting from the 10% US tariff on GCC imports, which excludes energy products and has limited impact due to low US export exposure. Leaders of the pack Saudi Arabia's GDP forecast has been revised up to 5.2% for 2025, driven by strong oil output and a 5.3% projected rise in non-oil activities. Despite an 18% year-on-year drop in oil revenues during Q1 and growing fiscal deficits, investor confidence remains firm, with S&P upgrading the Kingdom's credit rating to A+. The UAE is expected to post 5.1% growth in 2025, supported by a 4.7% rise in non-oil GDP, increased oil output, and continued strength in tourism and investment. The D33 agenda and AI-focused collaborations are seen as key contributors to its expanding economic base. Dubai's 5.3 million international visitors in Q1 highlight the momentum in the tourism sector, projected to contribute nearly 13% of the UAE's GDP this year. Future outlook While the global economy struggles under trade tensions and slowdowns, the Gulf appears to be charting its own course, powered by diversification, infrastructure spending, and a strategic recalibration of oil production.
The Sun
3 days ago
- Business
- The Sun
Malaysia's 2025 growth to slow on global headwinds
PETALING JAYA: Malaysia's economy is projected to slow in 2025 due to mounting external headwinds, despite a temporary surge in exports early in the year. Resilient demand for electrical and electronics (E&E) products and a recovering tourism sector are expected to buffer economic growth, with Bank Negara Malaysia (BNM) set to proactively support domestic demand through monetary easing amid low inflation. The ICAEW Southeast Asia Economic Insight: Q2'25 report, forecasts Malaysia's GDP growth will moderate to 4.3% in 2025, down from 5.1% in 2024. This slowdown reflects broader global economic uncertainties, particularly stemming from trade tensions and weaker demand from key trading partners, including the US and China. Malaysia's goods exports surged by 26% year-on-year in April 2025, driven by businesses front-loading shipments to the US to avoid impending tariff hikes. However, this is expected to be a temporary boost, with export growth likely to moderate significantly in the second half of the year. The report notes that goods export growth had already slowed notably to 1.6% year-on-year in Q1'25, well below the 7.1% average growth rate recorded over the preceding three quarters. Despite Malaysia's diversified export base, it remains vulnerable to external shocks, with more than 4% of its GDP and approximately 11% of its gross exports tied to US demand, either directly or indirectly, further underscoring the country's vulnerability to external shocks. A blanket US tariff rate of 10% on Malaysian imports, although lower than the initially proposed 24% rate, still poses substantial downside risks for exporters. Additionally, weaker demand from China, Malaysia's largest export destination, creates further threats to Malaysia's external trade environment. Resilient global demand for electronics, crucial as intermediate goods in global supply chains continues to support Malaysia's E&E exports, which have grown by approximately 20% year-to-date. This robust performance is crucial, given Malaysia's key role in the global semiconductor supply chain. Securities Commission Malaysia executive chairman and ICAEW council member Datuk Mohammad Faiz Azmi recently noted that Asean's strength lies in its unity and shared purpose. In a time of global uncertainty, he had said working together and investing within the bloc will be key to unlocking the region's potential. He made the statement during the Asean Investment Conference 2025, held in Kuala Lumpur, where he also emphasised the importance of deepening regional cooperation to ensure resilience against global shocks. Tourism, particularly driven by Asean visitors who accounted for 67% of total tourist arrivals in 2024, remains another critical buffer for economic growth. While tourism-related services exports grew robustly by 17% year-on-year in Q1'25, future visitor arrivals may face headwinds from employment and income uncertainties in key source countries. With elevated public debt constraining fiscal expansion, monetary policy is anticipated to play a pivotal role in supporting the domestic economy. Inflation has remained subdued at around 1.5%, creating room for BNM to introduce a 50 basis-point rate cut later in 2025. The central bank has already signalled an accommodative stance, aiming to mitigate risks stemming from subdued domestic investment and consumer spending. The ICAEW report also highlights economic indicators from March 2022 to March 2025, noting a clear deceleration trend in Malaysia's GDP growth, private consumption, and goods and services exports – emphasising the broader economic slowdown driven by external uncertainties and cautious domestic sentiment. Despite the turbulence, Malaysia's economy is expected to stay on course, supported by resilient key sectors and timely policy action.
