Latest news with #Fitch
Yahoo
a day ago
- Business
- Yahoo
Global economy to slow amid 'most severe trade war since 1930s', says Fitch
The world economy faces a sharp slowdown induced by the most severe trade war since the 1930s, according to Fitch. The credit rating agency has pointed to the ongoing tariff conflict between the two economic superpowers as one of the sharpest confrontations in recent years. It notes that the scale of this trade war has been unprecedented since the Great Depression. Fitch has recently adjusted its forecast for the US effective tariff rate, now estimating it at 14.2%. This is a revision downwards, significantly lower than the 27% rate Fitch projected in April. The agency attributes the adjustment to US president Donald Trump's decision to dial down his aggressive stance on imposing widespread tariffs on other countries. However, despite this recent shift in policy, Fitch cautions that the economic outlook remains weak. "Our latest GDP forecasts reflect extreme volatility in US trade policy in recent months, which has increased uncertainty and will further weigh on growth," the agency said. Read more: FTSE 100 LIVE: Stocks higher as Trump says US 'signed' China deal, traders look to inflation data Fitch looked at the broader economic disruptions caused by the trade conflict, noting that tariffs have dampened US business and consumer confidence. This, in turn, led to a surge in imports in the first quarter of 2025 as US consumers and businesses rushed to preemptively stock up on goods before expected tariff hikes. Alongside this, inventories rose sharply. Despite these trends, Fitch found little evidence of an immediate impact on the US consumer price index (CPI). However, the agency noted that upstream producer prices and various price pressure measures from surveys have seen an uptick, signalling potential inflationary risks down the line. "The tariffs have reduced US business and consumer confidence and prompted a spike in US imports in 1Q25 as US residents sought to front-run tariff increases. Inventories also rose sharply. There is little evidence of any impact on the US CPI so far, but upstream producer price and survey measures of price pressures have risen," Fitch said. The agency also pointed to downward pressures on US financial asset prices, marked by increased equity market volatility, a weakening dollar, and rising long-term 30-year government bond yields. While the trade conflict between the US and China has been a drag on global economic growth, recent months have offered some reprieve. This truce has provided the space for some positive revisions in growth expectations for key global economies. Read more: UK economy likely to grow at moderate pace amid inflation 'uncertainty', warns Bailey Fitch has revised its US GDP growth forecast for 2025 upwards, from 1.2% to 1.5%. Meanwhile, China's growth is now expected to reach 4.2%, up from a previous forecast of 3.9%. In Europe, the outlook for the eurozone has also improved, with Fitch upgrading its growth forecast for the region from 0.6% to 0.8% for 2025. However, even with these positive revisions, inflation risks remain elevated. Fitch pointed out that the volatility in oil prices, particularly the expected average crude price of $70 per barrel in 2025, could further strain inflationary pressures across the global economy. As the world continues to navigate this uncertain economic landscape, the long-term impact of the US-China trade war remains a critical factor in shaping global growth in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New York Post
a day ago
- Business
- New York Post
Why buying NYC bonds could pay off — even if Zohran Mamdani becomes mayor
A crazed socialist who knows little about private sector employment because he never held a real job could be running New York City – which seems like the biggest sell signal imaginable if you're one of those Gothamites who own 'tax-free' municipal bonds issued by the Big Apple. But there's a good case to be made for playing an investment long game even if Zohran Mamdani becomes mayor. Full disclosure: I hold NYC bonds, so I've done more than a little work on this issue. Muni's — as they are known in the market – don't get the respect they deserve from investment advisers because of the business media's obsession with the stock market and the next hot tech company. 3 There's a good case to be made for playing an investment long game even if Zohran Mamdani becomes mayor. Jack Forbes / NY Post Design But they deserve your consideration: If you have a few bucks, they offer immense tax advantages. They are triple-tax free — free of city, state and federal taxes — when you buy a bond issued by the city or town where you live. Given the high-taxes in New York City, and New York State, you can see why they're a good deal. If you hold to the time they mature, you don't have to worry about any adverse market moves. You just sit back and clip coupons. NYC muni returns seem a lot lower than stocks, but remember they're not taxed. Here's where things can get dicey if you're a muni holder. It's rare but municipalities have been known to file for bankruptcy and screw bond holders. Puerto Rico did that not too long ago, same with Detroit and Orange County, Calif., back in the 1990s. NYC came close in the 1970s during the infamous financial crisis, but it avoided a full-on default. The city's budget under Eric Adams is pretty solid today for all Gotham's problems. But remember defaults do occur when fiscal leaders spend more than they have. Mamdani, if you take him at his word, wants to spend money like crazy and tax rich people and businesses so much that they will have little choice but to keep moving to Florida. It should be a recipe for default, and at least lower muni-bond prices following downgrades in ratings by bond-monitors like Fitch, S&P and Moody's. 3 Mamdani, if you take him at his word, wants to spend money like crazy and tax rich people and businesses so much that they will have little choice but to keep moving to Florida. / MEGA Bond holders, if he has his way, will be last to get paid and that's if there's any money left from his idiotic spending plans. Fortunately for NYC muni buyers, it's really not Mamdani's call. There are two main types of NYC bonds – general obligations and something known as the Transitional Finance Authority (or TFA) debt, which was set up when the city hit its state-mandated limit to issue more debt so it could build infrastructure and keep the lights on. Both have what's known as 'liens' or first dibs on tax revenues. 3 The city's budget under Eric Adams is pretty solid today for all Gotham's problems. But remember defaults do occur when fiscal leaders spend more than they have. AP The GOs lien, created after the fiscal crisis to give people enough confidence to buy debt, is on property taxes. TFA gets first crack on personal income taxes and sales taxes before Mamdani might get his hands on the money. This is all mandated by state law, not the city's so it would take an act of the state Legislature to change the order of these payments, which is possible, though unlikely. The city and state need access to the market and messing with this would certainly prevent that. Here's where things could get interesting. If Mamdani becomes mayor, prices of NYC munis will fall because of his spending and because people and businesses will likely flee and those bond ratings will tank. Prices will dip since traders will bet there's less money to go around. But remember it pays to hold muni bonds to maturity and collect those coupons while you wait until you get your principal back at maturity. And in NYC, NYC muni holders get paid first. Given the high tax nature of the place, these bonds are often in demand, meaning you can make the case that Mamdani is a buying opportunity. One potentially big caveat: There are a lot of Mamdanis in Albany, so it's possible that Albany could undo all those bondholder protections down the road. Either way if you already own NYC debt, now is not time to panic – even if a rank amateur takes up residence in Gracie Mansion.
Daily Mirror
a day ago
- Daily Mirror
British tourist goes to Switzerland supermarket and is floored by the prices
A British mum decided to check out a supermarket in Switzerland, after she and her family packed up their life in the UK to travel the world, and showed how different the prices of groceries are We're all familiar with how much the prices have gone up in British supermarkets with weekly food shops getting more and more expensive but we've learnt to accept this and carry on buying the groceries we need. When going on holiday or travelling to a new country, it's common to look at the prices of everyday items and compare them to the UK. A family-of-five left the UK to travel the world and have been documenting their journey on TikTok where they are known as Fitch Family Adventures. The mum, who is not named, shared a video giving a tour of a supermarket in Switzerland and showed that the prices are even more expensive than in Britain. Switzerland is generally considered an expensive country, especially for tourists, with the cost of living, including accommodation, food and transport, being significantly higher than in many other European countries. The Brit mum said: 'We are in Switzerland and we're about to go into the supermarket so I thought I'd show you how much some of the shopping costs here as it is known for being really, really expensive.' She found a pack of Bio Tomaten Marzanino tomatoes for 4.95 Swiss Francs, equal to £4.52. Then she had a look at the ready-made salads and found a caesar salad with caesar dressing for 6.80 Swiss Francs, which is £6.20, and another mixed salad with cucumber and red cabbage for 7.20 Swiss Francs, equal to £6.57. Next, the British tourist spotted a variety of pizzas with toppings like black olives and deli meat for 12 Swiss Francs, which is £10.94. After this she explored the sweet treats offerings and found a pack of four Munz ladybug chocolates for 4.75 Swiss Francs, equal to £4.33. There was also a 186g box of Celebrations for 3.95 Swiss Francs (£3.60), a pack of Kinder Bueno chocolate bars for 2.80 Swiss Francs (£2.55), six packs of Smarties priced at 4.75 Swiss Francs (£4.33) and a Toblerone five pack with each bar weighing 100 grams, on sale for 13.20 Swiss Francs (£12.04). Moving onto the bakery section, the mum saw a pack of crusty bread rolls for 3.10 Swiss Francs (£2.83) which she thought was 'not too bad.' Finally, she checked out the price of a pack of A4 paper, explaining that her children wanted to do some drawing, and found 500 sheets for 11.95 Swiss Francs, equal to £10.90. One TikTok user asked: 'How do people afford to live there?', to which The Fitch family replied: 'We definitely found it difficult to afford things as tourists.' Switzerland is home to the supermarket chains Migros, Co-op, Denner, Aldi and Lidl but there are also higher end supermarkets, such as Manor Food and Globus. International moving and relocation company Packimpex explains on its website that salaries in Switzerland in sectors like finance, healthcare and IT are often higher than the European average, leading to increased costs for essentials, as well as luxuries, It adds: 'The Swiss Franc, one of the world's strongest currencies, further contributes to the high cost of living. This robust currency makes imported goods, which account for a significant portion of the market, more expensive. 'Everyday items such as groceries, clothing, and electronics often cost more than in neighbouring countries due to currency valuation and steep import duties.'
Khaleej Times
2 days ago
- Business
- Khaleej Times
Global ratings agencies laud UAE's economic resilience
The world's top three credit rating agencies – Fitch Ratings (Fitch), S&P Global (S&P), and Moody's Investors Service (Moody's) – have assigned strong sovereign credit ratings for the UAE in their latest updates. S&P announced on June 17, that it assigned the UAE's sovereign rating at 'AA' with a stable outlook. Moody's, in its annual review for 2025, affirmed the rating at 'Aa2' with a stable outlook. Fitch also affirmed the UAE's rating at 'AA-' with a stable outlook on June 24. This consensus by all three major global credit rating agencies highlights the UAE's advanced fiscal standing and strengthens its position among the few countries globally with strong sovereign credit ratings from all three top agencies, and reflects the continued international confidence in the strength of the UAE economy and the sustainability of its fiscal policies, analysts say. The ratings confirm the UAE's ability to diversify and boost non-oil revenues, maintain sound fiscal discipline, manage risks effectively, and uphold prudent fiscal policies. All of these factors have contributed positively to economic stability and sustained growth across various sectors. S&P's report reflects the agency's assessment of the UAE's strong financial position, in addition to the strength of the government's consolidated sovereign assets. The agency expects that regional geopolitical tensions will, overall, have a limited impact on the UAE, given the country's large sovereign wealth and track record of internal stability. Moody's report highlights the UAE government's continued efforts to expand and diversify non-oil revenue sources, support the development of non-oil sectors, and enhance the country's appeal to foreign investors and skilled talent. Despite persistent geopolitical tensions in the region, the UAE's effective policy frameworks help mitigate these challenges through advancing economic diversification. Fitch's report noted the elevated geopolitical risks in the region, while affirming the UAE's strong ability to withstand short-term disruptions, supported by its substantial fiscal and external buffers. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister, and Minister of Finance, said: 'The affirmation of the UAE's strong sovereign rating by the world's top three international credit rating agencies, and their consensus on a stable outlook, reflects the deep-rooted international confidence in the resilience of our national economy and the efficiency of our fiscal policies.' He affirmed that the UAE continues to implement economic policies grounded in diversification, transparency, and fiscal discipline, with a strong focus on increasing non-oil revenues and achieving financial sustainability. This reflects the integrated performance of government entities and long-term strategic planning, which continue to reinforce the UAE's position as a flexible and credible global economic hub. Sheikh Maktoum added: 'At the Ministry of Finance, we remain committed to working closely with all government entities to enhance the efficiency of resource management, develop productive sectors, and improve the country's investment appeal. The development of the sovereign yield curve for the dirham was a major milestone in enhancing market transparency, providing investors with a reliable benchmark for pricing dirham-denominated debt instruments. This strengthens the UAE's presence on the global economic map and reinforces its ability to confidently navigate regional and international changes and challenges — by expanding the investor base and enhancing the country's reputation as a reliable and attractive destination in global capital markets.'
Arabian Post
2 days ago
- Business
- Arabian Post
Ghana Parliament Greenlights $2.8 Billion Debt Relief Deal
Ghana's parliament has given approval to a $2.8 billion debt restructuring agreement with 25 creditor nations, including China, France, the United States, Germany and the United Kingdom. This authorisation is vital for unlocking further disbursements from a $3 billion IMF-backed bailout programme initiated in May 2023. Lawmakers, endorsing the restructuring unanimously, approved measures under a memorandum of understanding signed in January 2025 that reschedule debt payments falling due between 20 December 2022 and 31 December 2026. Repayment has been deferred until the 2039–2043 period, affording Ghana over 15 years of fiscal breathing space. Interest on the restructured debt will be set between 1% and 3%, significantly below prevailing market rates. This intervention, coordinated through the Official Creditor Committee, is poised to fortify Ghana's macroeconomic stability by easing immediate liquidity pressures and supporting long-term debt sustainability. ADVERTISEMENT Since defaulting on most of its external debt in December 2022, Ghana—Africa's second-largest cocoa producer—has worked to stabilise its economy amid high inflation, a depreciating currency and contractionary pressures. The IMF bailout has helped to arrest market downgrade momentum, including a ratings revision from Fitch. Finance Minister Cassiel Ato Forson described the deal as a turning point, enabling a reduction in debt-to-GDP to around 55% by 2026 and the debt-service-to-revenue ratio to fall below 18% by 2028. He noted the government plans to channel the fiscal space created into critical development sectors such as infrastructure, agriculture and energy. Despite official creditor backing, Ghana still faces negotiations with commercial creditors over approximately $2.7 billion in private loans. These discussions, guided by the 'comparability of treatment' principle and the most-favoured-creditor clause, aim to prevent preferential terms and ensure cohesion between official and commercial agreements. Analysts caution that failure to finalise terms with private lenders could delay full debt relief and weigh on investor confidence, even as official support strengthens. This parliamentary action is expected to unlock the next IMF tranche under the three-year programme, which will in turn support Ghana's ongoing fiscal consolidation and monetary stabilisation efforts. Reaction from the business community has been cautiously optimistic. Observers note that by deferring large debt repayments until the late 2030s and capping interest rates, Ghana can prioritise capital investments and social spending in the short to medium term. However, success will be contingent on continued IMF compliance, central bank tightening to curb inflation, and the outcome of upcoming commercial creditor talks. As Ghana progresses towards formalising these bilateral agreements, experts suggest that solidifying its economic reform agenda will be essential. Any reversal or lack of follow-through risks undermining the country's debt trajectory ahead of contested elections scheduled for 2026.
