16/05/2025

FRIDAY | MAY 16, 2025

16

BIZ & FINANCE

Apec: US tariffs to trigger stagnant trade in Asia

Thai consumer confidence hits seven-month low BANGKOK: Thai consumer confidence dropped for a third straight month in April, hitting its lowest level in seven months due to concerns over US tariffs and a slow domestic economic recovery, a survey showed yesterday. The consumer index of the University of the Thai Chamber of Commerce fell to 55.4 in April from 56.7 in the previous month, the university said in a statement. “Confidence has steadily declined ... due mainly to the trade war,” university president Thanavath Phonvichai told a press conference. “Purchasing power remains stagnant, suggesting confidence is still in a downward trend,”he said, adding consumers were hesitant to make purchases, especially on durable goods, homes, vehicles, and travel. Thailand will face a 36% US tariff if a reduction cannot be negotiated before a moratorium expires in July. The US has set a 10% tariff for most nations while the moratorium is in place. Thailand has sent a trade proposal to Washington as part of its efforts to avoid the tariffs, Finance Minister Pichai Chunhavajira said on Wednesday. Thanavath said if tariffs remained at 10% for most nations, then it could cut Thailand’s economic growth by up to 1 percentage point this year. Earlier this month, the Finance Ministry cut its 2025 forecast for growth in Southeast Asia’s second-largest economy to 2.1% from 3% due to the impact of US tariffs and a global slowdown. The economy expanded 2.5% last year, lagging regional peers. – Reuters India bond prices slip as declining US peers weigh on sentiment MUMBAI: Indian government bond prices fell yesterday, snapping a two-day rally, as US peers declined, while traders await the domestic central bank’s debt purchase. The yield on the 6.79% government bond maturing in 2034 rose to 6.3098% as of 10.10am IST (12.40pm in Malaysia), compared with the previous close of 6.2855%. The yield on the new 10-year benchmark 6.33% bond maturing in 2035 rose to 6.2655% versus its previous close of 6.2398%. Yields move inversely to prices. “We are seeing some selling pressure because of rising US Treasury yields, but we could see some buying if the prices come down further, depending on how the central bank’s open market operation goes,”a trader with a state-run bank said. The ten-year US Treasury yield was at 4.53%, up 4 basis points in the last two sessions. Traders are now awaiting the Reserve Bank of India’s scheduled debt purchase worth 250 billion rupees later this week. In the last two sessions, private banks emerged as the largest buyers of Indian government bonds as traders with lighter books continued to build positions after a soft inflation print. These lenders bought bonds worth 92.6 billion rupees (RM4.6 billion) on a net basis on Tuesday, their highest single-day purchase in eight years and six months. They bought 127 billion rupees worth of bonds in the last two sessions. India’s overnight index swap rates rose in early trades, tracking the rise in domestic and US Treasury bond yields. The one-year OIS rate was up 2 basis points at 5.65% while the two-year OIS rate was up 2 bps at 5.53%. The most liquid five-year OIS rate was 5 bps higher at 5.67%. – Reuters

downgrading of the regional export outlook to the impact of American tariffs and warned the reach of their ripple effects is still greater. “We notice US tariffs are affecting not just goods trade, it’s also affecting services trade and financial markets. “That’s why governments are having trade talks, but they are still not back to before early April,” Kuriyama told reporters. Greer is also scheduled to hold a bilateral meeting with his South Korean counterpart, three weeks after their opening round of trade talks in Washington. He will also have his first face-to-face meeting with New Zealand and meet with representatives from other Asian countries. “We’re moving as quickly as we possibly can with folks who want to be ambitious,” Greer told CNBC television before he departed for Jeju on Tuesday. His office declined to comment on his schedule for bilateral meetings. The Apec gathering is being attended by trade ministers and envoys from member countries including Japan, Canada, Mexico and Russia. The trade ministers’ meeting is being held as part of a second round of senior officials’ meetings ahead of an Apec leaders’ summit this year in Gyeongju, South Korea. Apec accounts for about half of global trade and 60% of global GDP. – Reuters

1989, when the non-binding economic forum was established. This period saw merchandise trade increase more than nine-fold. Still, in a sign of potential further progress to address trade friction between the world’s biggest economies, US Trade Representative Jamieson Greer met Chinese trade envoy Li Chenggang on the sidelines of the gathering, South Korea’s Trade Minister Cheong In-kyo told reporters without elaborating. The meeting comes after Greer and Li agreed to slash steep tariffs at their first face-to-face talks in Geneva on May 10 and 11. For two days from yesterday, trade representatives of the member economies will discuss multilateral trade and other cooperation agendas, including reform of the World Trade Organisation (WTO) amid current challenges. The Trump administration views the WTO as a body that has enabled China to gain an unfair export advantage and has recently moved to pause US funding to the institution. As host of the annual conference, Cheong will highlight how global economy and trade face added strain from uncertainties and will urge the bloc to foster dialogue to tackle political and economic challenges, according to prepared remarks relayed by his ministry. Ahead of the main sessions, Apec policy director Carlos Kuriyama attributed the

o Regional economic growth projected to slow to 2.6% this year

SEOGWIPO: The Asia-Pacific Economic Cooperation (Apec) grouping warned yesterday that exports in the region will barely grow this year amid the onset of US tariffs, as American and Chinese trade representatives met on the sidelines of the gathering. The 21-member Apec bloc projected exports in the region would rise by only 0.4% this year, compared with 5.7% last year, in a regional trends analysis report released at its 2025 meeting of ministers responsible for trade in South Korea’s resort island of Jeju. The bloc also cut its regional economic growth forecast for this year to 2.6% from 3.3% previously. “Trade growth is set to decline sharply across Apec due to lower external demand, particularly in manufacturing and consumer goods, while rising uncertainty over goods-related measures weighs on services trade,” Apec said in a statement. The Donald Trump administration’s sweeping tariffs have targeted more than half of the Apec grouping, where regional average tariff rates fell to 5.3% by 2021, from 17% in

Cheong speaking during the opening ceremony of Apec Ministers Responsible for Trade Meeting at International Convention Centre in Seogwipo. – REUTERSPIC

Colombo restructures US$931 million in credit lines with New Delhi COLOMBO: Sri Lanka has restructured nearly US$931 million (RM3.9 billion) in lines of credit and buyers’ credit facility agreements with the Indian government, the island nation’s Finance Ministry said yesterday. Lanka by the Export-Import Bank (EXIM) of India, the Finance Ministry statement said. New Delhi and Colombo have worked to deepen ties as India’s southern neighbour recovers after plunging into financial crisis in 2022. International Monetary Fund (IMF), which approved the fourth review of its programme last month, has played a critical role in Sri Lanka’s post-crisis recovery.

Sri Lanka finalised a deal with Japan, another key creditor in March to restructure US$2.5 billion in debt after entering into a preliminary deal with key bilateral lenders last June. It still needs to sign similar agreements with China for US$4.75 billion in debt. Colombo also secured a deal to restructure US$12.5 billion of its debt with international bondholders last December. – Reuters

The deal between the two countries will facilitate deeper cooperation on multiple projects including an energy hub agreed to during a visit by Indian Prime Minister Narendra Modi last month. The debt restructuring covers seven line of credit and four buyers credit facility agreements that were made available to Sri

India provided US$4 billion in assistance to Sri Lanka to help it weather the tumult including a swap arrangement and other emergency assistance. The crisis left Sri Lanka struggling to pay for fuel, medicine and cooking gas. A US$2.9 billion bailout from the