Fiscal Policy

India compounds new central bank boss’s challenges

10 Dec 2024

Sanjay Malhotra will have enough on his plate as RBI governor dealing with a slowing domestic economy amid rising global tensions. But the messy way in which New Delhi handled the transition from six-year incumbent Shaktikanta Das means Malhotra starts on the back foot.

China’s wealth pledge will face tough sceptics

10 Dec 2024

In a key meeting, Beijing identified stabilising stock and property prices as a top task in 2025. It recognises that people will spend more if they feel rich. This implies a policy bottom for both markets. Yet observers are forecasting a huge range of outcomes in the coming year.

India’s slowdown flashes an early-warning signal

2 Dec 2024

GDP growth slipped to 5.4% last quarter, the slowest pace in nearly two years, on weak manufacturing and spending. Perhaps it’s a blip. But the Adani fallout, Trump tariff threats and China stimulus could all deal blows to rosy assumptions about the world’s fifth-largest economy.

Mapping the way for Elon Musk’s efficiency drive

26 Nov 2024

Tesla’s CEO has touted the idea of slashing $2 trln from the bureaucracy, a fanciful figure that exceeds optional budget items and threatens to ape the worst of UK and Argentine austerity. There may be a tortuous path to cut $500 bln, but improving services is a far better route.

Market’s Trump trades at risk from bond vigilantes

20 Nov 2024

US consumer prices have risen 21% since 2020, helping President-elect Donald Trump win the White House. His policies, though, may stoke inflation. Stocks, bitcoin and the dollar like a hot economy. But a rising deficit could upset debt investors and hit the current market stars.

One country, two China property crises for tycoons

20 Nov 2024

On the mainland, developers are being forced by Beijing to deliver presold homes. In Hong Kong, developers may chase down buyers who cancel purchases. Mega-rich families of the finance hub can keep their property flagships in decent shape while their onshore peers rot.

Trump’s ideal Treasury pick: squarer of circles

18 Nov 2024

The president-elect wants tariffs that could up inflation by 75 bps, but also booming stocks and calm bonds. Jostling is underway between banker Howard Lutnick, investor Scott Bessent and others to be this agenda’s key emissary. But personnel cannot resolve policy tension.

Chinese planners face an anxious wait

5 Nov 2024

The outlook for trade will worsen regardless of who wins the US election. It may take months for the new president’s policies to take shape. Beijing also needs time to assess how well its plan to stimulate its $18 trln economy is working. No point wielding any bazookas yet.

China consumer is epitome of delayed gratification

4 Nov 2024

Beijing says it wants to boost consumption’s 53% share of GDP as investment-led growth fades. Yet central planning is hard to square with free-spirited spending. Rebalancing without a period of stagnation is not easy. Recent policies also suggest the old model is hard to ditch.

Election throws Japan into turbulent waters

28 Oct 2024

The ruling LDP's drubbing at the polls means whichever party forms the government will have to rely on rivals. That will add pressure to boost fiscal spending and make it harder for the central bank to raise rates, slowing the country's economic transformation.

Biden’s precise industrial policy may soon mutate

24 Oct 2024

National Security Adviser Jake Sullivan says protecting key technology and renewable energy was an apt response to China’s threat, while similar policies from allies vindicate the US approach. But if Donald Trump returns, the same tariffs and sanctions may become blunter weapons.

UK budget is a tightrope walk over a black hole

24 Oct 2024

Finance Minister Rachel Reeves is due to set out tax and spending pledges while hemmed in by campaign promises and economic reality - even if debt rules are tweaked. In this Viewsroom podcast, Breakingviews columnists discuss the tall task of selling it to the public and markets.

Trump stumbles onto a useful globalist policy

22 Oct 2024

The protectionist presidential candidate floated an exemption for 4.4 mln US citizens living abroad from paying some $12 bln of income tax at home. It would streamline an unwieldy patchwork system for expatriates. And if structured properly, it might even help prevent evasion.

UK tax threat revives gambling stocks’ M&A saga

14 Oct 2024

Entain and Evoke shares fell over 10% on reports of a 3 bln pound tax hike on the sector. After a troubled few years in which it was a target for MGM, debt-laden Entain had looked on the mend. If Britain turns the fiscal screw, smaller players may need to bulk up.

China stimulus aims at its greatest wall of debt

14 Oct 2024

The finance ministry pledged to tackle local government borrowings. It reveals an intent to smash systemic financial risk and, by not rushing to support consumer demand, a desire to avoid repeating past spending mistakes. Beijing's plan is welcome but still missing key details.

UK government can still trip over lower fiscal bar

11 Oct 2024

Chancellor Rachel Reeves needs an extra 31 bln pounds in public investment by 2029 to boost the country’s anaemic growth. Easing the spending rules is a start. But without a clear plan and return targets, the Labour administration will fall into a debt trap of its own making.

China’s stock market bazooka is yet to fire

10 Oct 2024

The People’s Republic recently unveiled a raft of measures to solve a housing bust and support the market, producing a pop of post-vacation enthusiasm. That’s now waning as investors await a bigger move. In this Viewsroom podcast, Breakingviews columnists discuss what comes next.

New UK government is mired in unreal vibecession

2 Oct 2024

After winning the election, Labour leaders repeatedly warned of financial pain ahead. That helped drag consumer confidence to a six-month low in September. The economy is actually improving but this month’s budget will have to raise both much-needed money and rock-bottom morale.

Kamala Harris’ economic plan bows to realities

27 Sep 2024

Unlike Biden's crisis-sized agenda, Harris faces fiscal headwinds and divided government - if she manages to win. Promises of tax credits for small businesses and families, along with a deal on taxes with Republicans, are the most she's promising, and most she can deliver.

Beijing directs fiscal firepower at itself

27 Sep 2024

The government may sell $284 bln of special bonds. Part of that will be to boost consumption while a huge chunk will probably support indebted local provinces and state banks. That'll help GDP hit the official target this year but won't do much to alter the longer-term picture.