Economy
Updates on the state of the economy, growth, inflation, and employment.
Commonwealth Bank of Australia (CBA) has urged the Reserve Bank of Australia (RBA) to ban surcharges on credit and debit cards as the central bank considers the future of Australia’s A$1 trillion-plus payments system. CBA said it had noted in recent years a shift to contactless payments and e-commerce and an increase in payments solutions that sit outside the RBA’s bank’s mandate and regulation, including buy now, pay later, digital wallets and three party schemes. In a response to an RBA issues paper, Australia’s largest bank said it supported the spirit of the review because payments affected all consumers and businesses and the safety, reliability, efficiency and convenience of the system was paramount. CBA asked the central bank not to formulate policy responses to some of the matters raised in its issues paper, which would be possible only when the Payment System Regulation Act (PSRA) was amended. The remaining issues for consultation could be addressed without changes to the PSRA, including surcharging, which is the imposition of an additional fee by a merchant or institutions for card payments. “We believe the most impactful initiative would be to address surcharging on debit and credit,” the CBA said in its
China’s economy recorded a 5.4% year-on-year expansion in the fourth quarter of 2024, exceeding market expectations as government stimulus measures began to take effect. The result marked an improvement from the 4.6% growth recorded in the previous quarter and was higher than the 5% forecast by economists. The NBS highlighted that, despite the stronger finish to the year, external pressures on the economy were intensifying while domestic demand remained insufficient. It called for "more proactive and effective macro policies” to address these challenges. China's retail sales rose by 3.7% in December compared to the same period last year, surpassing expectations of 3.5%. Industrial output also exceeded forecasts, expanding by 6.2% year-on-year in December, which highlighted the country's growing production capabilities. However, full-year fixed asset investment increased by just 3.2%, slightly missing projections of 3.3%. The real estate sector continued to be a significant drag on growth, with investment in the sector falling by 10.6% compared to the January to November period. The urban unemployment rate edged up to 5.1% in December from 5.0% in November, reflecting ongoing challenges in t
Banks in the Gulf Cooperation Council (GCC) can anticipate higher lending growth and a lower cost of risk that will compensate for declining margins throughout 2025, according to S&P Global. The GCC is a political and economic alignment between the oil-producing Arab nations of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. “GCC bank margins will decline mainly due to declines in net interest margins as central banks across the region cut their rates to maintain their peg to the US dollar,” the ratings agency said in a note. “Lending growth will improve in most of the GCC due to strong deposit growth. The cost of risk will decrease for GCC banks due to past precautionary provisioning. S&P projects that geopolitical risk will remain in check and that even if those issues persist or increase, banks in the region are well-positioned to weather the storm. “Performance at GCC banks will vary by country. In Kuwait and Qatar, there is apparent overexposure to the real estate sector for lenders.” Though Kuwait’s easing visa restrictions may increase demand and prices for real estate, for Qatar, much of its real estate is in oversupply due to construction associated with hosting the FIFA
The World Bank has warned the global economy is set to grow at its slowest pace in almost six years. According to a recent report from the World Bank, this has been the slowest half-decade of Gross Domestic Product (GDP) growth in 30 years. A growth rate of 2.7% is predicted which would be the lowest in the years directly before and after the height of COVID-19. The BBC reported that the bank's deputy chief economist Ayhan Kose has warned the impending trade tariffs that President-elect Donald Trump intends to place on imports into the U.S. could have significant impacts on the global economy. As the U.S. is the world's largest importer of goods, the potential for higher taxes puts immense financial pressure on global trade. Trump has plans to impose 10-15% duties on all U.S. imports, targeting neighbouring countries Canada and Mexico, along with 60% on all goods from China, all countries which account for 40% of the US$3.2 trillion (A$5.1 trillion) of goods it imports each year. Other fears include the potential for interest rates to remain higher for longer along with policy uncertainty which could leave businesses lacking confidence and reduce investment. “Investment booms have the pote
United States retail sales posted a moderate gain in December, signalling strong consumer demand as households spent on motor vehicles and a variety of goods. The momentum reinforces the Federal Reserve's cautious stance on interest rate cuts in 2025. The Commerce Department reported on Thursday that retail sales rose 0.4% last month, slightly under 0.6% expected, following an upwardly revised 0.8% increase in November. Year-over-year, retail sales grew 3.9%. Strong performances were noted across various sectors, including a 0.7% rise in auto dealership sales, a 2.3% jump in furniture store receipts, and a 1.5% rebound in clothing sales. Specialty stores also saw gains, with sales at sporting goods, hobby, musical instrument and book stores climbing 2.6%, while miscellaneous retailers, such as gift shops and florists, reported a 4.3% increase. However, online sales edged up just 0.2%, and dining-related receipts at food services and drinking establishments declined by 0.3%. Building material store sales dropped 2%, while higher fuel costs drove a 1.5% increase in gasoline station receipts.
