09/09/2025

BIZ & FINANCE TUESDAY | SEPT 9, 2025

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Beijing pushing Asean to seal trade pact upgrade

Indonesia names Purbaya as finance minister after Sri Mulyani removed JAKARTA: Indonesia’s well-regarded finance minister Sri Mulyani Indrawati was removed from her position yesterday as part of a broader Cabinet reshuffle, with the president appointing an economist to replace her. State Secretariat Minister Prasetyo Hadi announced Sri Mulyani’s departure shortly before President Prabowo Subianto swore in Purbaya Yudhi Sadewa as her replacement. Purbaya has been head of the Indonesia Deposit Insurance Corporation since 2020. Prior to that, he served in various roles at several ministries, including deputy minister at the maritime and investment ministry. Sri Mulyani was one of Indonesia’s longest-serving finance ministers and had worked under three presidents. She won plaudits for reforming the taxation system and for her role in steering Southeast Asia’s largest economy through several crises, including the pandemic and the global financial crisis. In between her first and second stints as finance minister, she served as a managing director of the World Bank. The main stock index erased earlier gains to trade 1.3% down. The rupiah was little changed after the announcement, having been up around 0.7% against the dollar during the day. The announcement came after two weeks of protests and unrest across the country, which have included calls for a fairer taxation system. During some of the protests in late August, looters broke into Sri Mulyani’s home. Purbaya, who has master’s and doctoral degrees in economics from Purdue University, has also served as CEO of state-owned brokerage Danareksa Securities. – Reuters India official says Trump’s tariffs could shave 0.5% off GDP NEW DELHI: US President Donald Trump’s 50% tariffs on India could reduce the country’s gross domestic product by half a per cent this year, the nation’s chief economic adviser V. Anantha Nageswaran said in a Bloomberg TV interview yesterday. “Depending upon how long it lasts even in this financial year, it may translate into a GDP impact of somewhere between 0.5% to 0.6%,” he told Bloomberg TV. US President Donald Trump, who is seeking to broker an end to the Ukraine conflict, has said India’s oil imports are helping fund Moscow’s war effort and last month doubled tariffson imports from India to 50%. Finance Minister Nirmala Sitharaman said last week the world’s third-biggest oil importer and consumer will continue to buy Russian oil as it proves economical. US-India two-way goods trade totalled US$129 billion in 2024, with a US$45.8 billion US trade deficit, according to US Census Bureau data. Exporter groups estimate the tariffs could affect nearly 55% of India’s US$87 billion in merchandise exports to the US, while benefiting competitors such as Vietnam, Bangladesh and China. Nageswaran said he would stick to the government’s 6.3-6.8% growth forecast for the current fiscal year ending in March 2026, citing the April-June quarter’s 7.8% expansion, the fastest in over a year. – Reuters

China and the 10 Asean states are members of the Regional Comprehensive Economic Partnership as well, which also includes Japan, South Korea, Australia and New Zealand, but analysts say the RCEP is a less ambitious trade deal, with weaker provisions on areas such as e-commerce and phytosanitary standards. Beijing has also applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which includes Australia, Brunei, Britain, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, and is seen by analysts as the gold standard for trade policy. China should be able to meet CPTPP’s standards, trade experts say , forcing members to make a politically uncomfortable decision whether to let Beijing join a deal created to counter its growing influence. – Reuters

open” major economy, while US President Donald Trump continues to target the region with punitive trade curbs. “(China) will push for the formal signing of the protocol on upgrading the China-Asean free trade agreement version 3.0 by the end of the year,” Yan said at a news conference in Beijing. “In the face of unilateralism and protectionism in global industrial chains, China and Asean have insisted on multilateral cooperation to maintain the stability and smooth operation of regional industrial chains,” he added, in a veiled reference to Trump’s trade policy. Last month, Chinese exports to Asean surged 22.5% from a year earlier to US$57.1 billion, making Southeast Asia China’s top export destination by value. The jump helped counter a 33.1% slump in U.S. shipments to US$31.6 billion.

BEIJING: China is pushing the Association of Southeast Asian Nations to sign an upgrade to their free trade agreement before the end of the year, Vice-Commerce Minister Yan Dong said yesterday, as Beijing seeks to diversify its exports amid US tariffs. Negotiations on the upgrade concluded in May, paving the way for improved market access in sectors such as agriculture, the digital economy and pharmaceuticals between China and the 10-member state Asean bloc, with Beijing seeking to position itself as the “more o Negotiations concluded in May for improved market access

German exports fall, industrial production rises BERLIN: German exports unexpectedly fell in July on a sharp decline in US demand due to tariffs, while industrial output rose, data showed yesterday.

Exports from Europe’s biggest economy fell by 0.6% in July compared with the previous month, data from the federal statistics office showed. This compared with a Reuters poll forecast for a 0.1% increase. Exports to the United States were down 7.9% compared with June. Germany’s export-oriented economy is expected to be badly affected by US import tariffs. The United States was Germany’s biggest trading partner in 2024 with two-way goods trade totaling €253 billion (RM1.07 trillion). The US imposed a 15% import tariff on most goods from the EU in a deal reached with the bloc in July to avert a bigger trade war between the two allies that account for almost a third of global trade. Exports to EU countries rose by 2.5% on the month, while goods to other countries outside the EU declined by 4.5%, the data showed. Meanwhile, German industrial production rose by 1.3% in July compared to the previous month, the data showed, while analysts polled by Reuters had predicted a 1% rise. The less volatile three-month on three-month comparison showed that production was 0.1% lower in the period from May to July than in the previous three months. After revision of the provisional results, production decreased by 0.1% in June compared with May, instead of 1.9%. The statistics office attributed the revision to corrections from a large enterprise in the

The Mercedes-Benz logo is seen as people stand in front of the company’s booth before the opening of the IAA Mobility fair in Munich, southern Germany. – AFPPIC

Imports fell 0.1% compared with June. The foreign trade balance showed a surplus of €14.7 billion in July, down from €15.4 billion in June and €17.7 billion in July of 2024. – Reuters

automotive sector and additional data provided. Separately, German industrial orders unexpectedly fell for the third straight month in July, data showed on Friday, declining by 2.9% on the month.

StanChart expects Fed to cut rates by 50 bps next week LONDON: Standard Chartered expects the US Federal Reserve to cut interest rates by 50 basis points at its policy meeting this month, double its earlier projection of a 25-bp reduction, following a soft August jobs report. way for a ‘catch-up’ 50 basis point rate cut at the September FOMC meeting, similar to what occurred at this time last year.” After a 50-bps cut the market could take time to price in a slower subsequent pace of cuts, the brokerage added.

cautioning that inflation remained a threat. Barclays revised its forecast on Friday to include 25 bps reductions at each of the remaining meetings this year, while Macquarie brought forward its expected December cut to October. Bank of America also revised its outlook, now expecting 25 bps cuts each in September and December, after previously forecasting no cuts this year. Markets are pricing in a 90% chance of a 25-bps rate cut next week and a 10% probability of a larger 50-bps reduction, according to the CME FedWatch Tool. – Reuters

Data on Friday showed US job growth weakened sharply in August and the unemployment rate rose to a near four-year high of 4.3%, confirming a softening labor market and bolstering the case for a rate cut this month. In a client note on Friday, the brokerage said that the labour market had shifted “from solid to soft in less than six weeks”. “August labour market data has paved the

Meanwhile, Morgan Stanley and Deutsche Bank do not consider the August jobs report weak enough to warrant a 50-bps rate cut in September, though they noted it could pave the way for reductions at consecutive meetings. Last month, Fed Chair Jerome Powell signaled a rate cut was possible at the Sept 16-17 policy meeting, citing rising labour market risks, while