07/01/2026

BIZ & FINANCE WEDNESDAY | JAN 7, 2026

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Global minimum tax deal amended: OECD

Bank of Thailand deputy governor says Q4’25 growth

expected to be positive BANGKOK: Bank of Thailand (BOT) deputy governor Piti Disyatat said yesterday the nation's economic growth was expected to turn positive in the fourth quarter of 2025, though he added that policymakers need to be judicious about making further interest rate cuts. “We expect the fourth quarter (gross domestic product) to be positive quarter-on quarter ... it (better) tells you its near-term momentum,“ Piti told the Reuters Global Markets Forum, adding that he expected Thailand to meet its annual growth forecast of 2.2% for 2025. If Piti's fourth-quarter prediction came to fruition, Southeast Asia's second-largest economy would avoid a technical recession after the economy shrank by 0.6% in the third quarter, its first contraction in 11 quarters. The BOT expects growth momentum to moderate to 1.5% this year before picking up to 2.3% in 2027. Piti also said he expected headline inflation to rebound into positive territory by March or April this year. Thailand's December annual inflation print, due today, is expected at minus 0.34%, according to a Reuters poll. Annual headline inflation was negative for the eighth month in a row in November, as the central bank forecast a negative 0.1% print for 2025, before a pick-up to 0.3% in 2026. In December, the BOT lowered rates for the fifth time since October 2024 to 1.25%, a total reduction of 125 basis points. Market parti cipants expect at least one more reduction in February, according to LSEG data. Piti said the BOT would robustly use its “remaining ammunition” to address shocks to the economy that could come from tightening global financial conditions, a deterioration in global markets or a further slowdown in domestic demand. “We are already running low on the policy space (and) have to be very judicious in using that room when the impact is most needed,”he added. – Reuters No rate cuts for now as inflation picks up: Philippine central bank MANILA: T he Philippine central bank expects to maintain interest rates at present levels as inflation picked up last month and growth likely slowed in 2025, its governor said yesterday. Inflation accelerated to 1.8% in December, its fastest pace in nine months, due to rising food and clothing prices, the statistics agency said. Consumer prices were up 1.5% in November. On a monthly basis, inflation picked up to 0.9% in December, the sharpest increase since September 2023. However, average full-year 2025 inflation stood at 1.7%, the slowest since 2016. Bangko Sentral ng Pilipinas (BSP) governor Eli Remolona said Philippine economic growth may have slowed to 4.6% in 2025, from the previous year’s 5.7% expansion and below the govern ment’s 5.5% to 6.5% target. “Given the data we have right now, we are not going to cut,” Remolona told a roundtable of a Manila-based club, while anticipating a recovery in growth this year and next. “I can say we are very close to where we want to be in terms of policy rate. There’s a chance we may cut some more or not move at all,” he said, though he added that a growth dip below 5% could justify further easing. The BSP cut its policy rate for five straight meetings last year, bringing its benchmark rate to a three-year low of 4.5%. – Reuters

negotiated by the Biden administration, saying it was not applicable in the US. The Trump administration threatened retaliatory taxes against countries that imposed levies on US firms under the 2021 deal. On Monday, the US Treasury Department said that it had worked to “reach agreement with the more than 145 countries in the OECD/G20 Inclusive Framework to have US headquartered companies remain subject to only US global minimum taxes while exempting them from Pillar Two.” “This side-by-side agreement recognises the tax sovereignty of the United States over the worldwide operations of US companies and the tax sovereignty of other countries over business activity within their own borders,“ the Treasury added. The update came after the Group of Seven (G7) nations agreed in June to exempt US multinational companies from a global minimum tax imposed by other countries. At the time, Bessent said he had asked Congress to remove a provision from a draft of Trump’s “One, Big, Beautiful Bill” that had been dubbed a “revenge tax,“ following progress on this agreement among the G7. The provision would have allowed the government to impose levies on firms with foreign owners, and on investors from countries deemed to impose unfair taxes on US businesses. – Reuters, AFP

o US concerns addressed with side-by-side framework, new ‘safe harbours’ ease compliance for multinationals

PARIS: More than 145 countries agreed on Monday to amend a 2021 global minimum corporate tax agreement, addressing Washing ton’s concerns the rules could penalise US multinational companies. The Organisation for Economic Cooperation and Development (OECD) said the fresh package preserves the 15% global minimum tax framework designed to ensure large multi nationals pay a baseline tax wherever they operate. The update includes simplifications and carve-outs to align US minimum tax laws with global standards, accommodating earlier objections raised by the Trump administration. OECD head Mathias Cormann said in a statement the arrangement “enhances tax certainty, reduces complexity, and protects tax bases”, US President Donald Trump declared in an executive order when he took office nearly a year ago that the OECD global minimum tax deal would have “no force or effect” for the US. Treasury Secretary Scott Bessent said Monday’s agreement would ensure that US headquartered companies would only be subject to US global minimum taxes and

preserve benefits of US research and investment tax credits. “This agreement represents a historic victory in preserving US sovereignty and protecting American workers and businesses from extraterritorial overreach,” Bessent said in a statement. He pledged to continue engagement with other countries on a “constructive dialogue” on taxation of the digital economy, a reference to a second, more difficult pillar of the OECD tax framework. As of October, more than 65 countries had begun implementing the 2021 global tax deal, which requires nations to apply a 15% corporate tax or impose a top-up levy on multinationals booking profits in jurisdictions with lower tax rates. The revised agreement solidifies global backing after G7 countries, including the US, brokered a deal in June exempting some US companies from parts of the original framework. A broader agreement, reached on Monday after Washington pressured holdouts to back the updated arrangement, helps stabilise the global deal. The pact’s future was thrown into doubt last January when Trump criticised the 2021 deal

Visitors at an international flower show at the Sabarmati riverfront in Ahmedabad, India, on Jan 4, 2026. Business confidence in India regarding future activity declined for the third consecutive month, reaching its lowest point in over three years.– AFPPIC India’s services sector growth hits 11-month low

BENGALURU: India’s services sector expansion slowed to its weakest pace in 11 months in December as new business growth eased and hiring stalled, a survey showed yesterday. HSBC’s India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, dropped to 58.0 last month from November’s 59.8, lower than a preliminary estimate of 59.1. A reading above 50.0 indicates growth in activity, while below that level points to a contraction. “While India’s service sector continued to perform well in December, the retreat in several survey indicators as 2025 ended may suggest a moderation in growth heading into the new year,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

November’s eight-month low. On the price front, input costs rose moderately in December, faster than in November but remaining below the long-term trend. Output price inflation remained weak with fewer than 3% of surveyed firms raising their fees. “What bodes well for the outlook is the benign inflation environment. If services firms continue to see only mild increases in their expenses, they should be better positioned to compete and limit price hikes, thereby boosting sales and creating more jobs,” De Lima said. HSBC’s India Composite PMI, including manufacturing activity which slowed to its weakest pace in two years, fell to 57.8 in December from 59.7 in November, marking an 11-month low. – Reuters

New business growth – a key gauge for demand – eased to its slowest pace since January 2025. While companies reported continued demand buoyancy and positive client interest, growth was moderated by competition from alternative providers offering cheaper services. The employment trend worsened as the 42 month hiring streak came to an end last month with firms marginally reducing staffing levels. Nearly all firms surveyed (96%) kept workforce levels unchanged. Business confidence regarding future activity declined for the third consecutive month, reaching its lowest point in over three years. But international demand provided a bright spot with new export orders accelerating from