标签： Asia

Indonesia’s parliament has taken a significant step toward approving a larger spending plan and a wider fiscal deficit for the 2026 budget than initially proposed by President Prabowo Subianto. On Thursday, the parliamentary fiscal oversight panel endorsed a total spending plan of 3,842.7 trillion rupiah ($233 billion), marking a 9% increase over the estimated 2025 budget. The fiscal deficit is projected to reach 2.68% of GDP, slightly higher than Prabowo’s August proposal but still below the legal threshold of 3%. The panel also set a revenue target of 3,153.6 trillion rupiah, a 10% increase over 2025 estimates. A final parliamentary vote is expected on September 23, with Prabowo’s coalition likely to secure approval. The budget aims to support Prabowo’s ambitious GDP growth target of 5.4% for 2026, with a long-term goal of 8% growth by 2029. The government plans to leverage the wider fiscal gap to drive economic growth, particularly as the U.S. Federal Reserve is expected to maintain an accommodative monetary policy until mid-2026. However, economists have cautioned against relying heavily on bond issuance to fund the deficit, urging the government to explore non-tax revenue sources. The budget also includes increased allocations for regional transfers, though they remain below 2025 levels. Regional leaders had expressed concerns over potential tax hikes to cover shortfalls, prompting the government to adjust spending plans to maintain social and political stability. Key allocations include 335 trillion rupiah for a flagship free meals program and 335.3 trillion rupiah for defense spending. The budget reflects the government’s commitment to balancing economic growth with fiscal prudence.

The Indian rupee experienced a decline on Thursday, September 18, 2025, mirroring the downward trend of other Asian currencies. This movement followed the U.S. Federal Reserve’s anticipated interest rate cut and its cautious approach to further easing of benchmark borrowing costs. The rupee closed at 88.13 against the U.S. dollar, marking a 0.36% drop for the day. Meanwhile, Asian currencies saw declines ranging from 0.1% to 0.6%. The U.S. dollar index, which measures the dollar against a basket of major currencies, dipped slightly to 96.9 but remained above a 3.5-year low reached immediately after the Fed’s policy announcement. HSBC analysts noted that the Fed’s stance, while consistent with market expectations, leaned more towards hawkishness than dovishness. Traders predict that the rupee will exhibit two-way price action in the near term, influenced by broader dollar movements, with support near 88.45 and resistance around 87.75-87.80. A Reuters poll revealed that investors have increased short positions on the Indian rupee and the Indonesian rupiah, driven by concerns over central bank rate cuts in Indonesia and U.S. tariffs impacting India. Bearish bets on the rupee have surged to their highest level since early February. In a positive development, India’s Chief Economic Adviser V. Anantha Nageshwaran hinted that the U.S. might soon eliminate the punitive tariff on Indian goods and reduce the reciprocal tariff from 25% to 10-15%. India’s benchmark equity indexes, the BSE Sensex and Nifty 50, each rose nearly 0.4%, while the yield on the benchmark 10-year bond increased by 4 basis points to 6.51%. Tight rupee liquidity, caused by income tax outflows, led to higher daily funding costs, prompting banks to turn to the foreign exchange swap market. The swap rate between Wednesday and Thursday peaked at 0.50 paisa, indicating a rupee interest rate of over 6%, as banks sought funds at elevated costs.

Automakers in the United States are grappling with the financial strain imposed by tariffs introduced during the Trump administration, which have added billions in costs to the industry. Despite these challenges, car manufacturers have largely absorbed these expenses rather than passing them directly onto consumers, a strategy that has delayed significant price hikes. However, as tariffs persist, the pressure to adjust pricing is mounting. According to industry analysts, the average manufacturer’s suggested retail price (MSRP) for new vehicles in the U.S. has seen only a modest increase of less than 1% from mid-March to mid-August, as reported by Edmunds. This cautious approach is expected to continue, with automakers implementing gradual price increases, particularly for higher-end models that offer better profit margins. General Motors and Ford have cited gross tariff-related costs of $5 billion and $3 billion, respectively, for the year. To mitigate these expenses, companies are exploring various strategies, including internal cost absorption and shifting some burdens to suppliers or dealers. Hyundai North America’s CEO, Randy Parker, emphasized the importance of maintaining competitive pricing to retain customers, despite tariff-related costs eroding the company’s bottom line by approximately $600 million in the second quarter. Analysts predict that automakers will begin to raise prices more noticeably in the latter half of the year, which could dampen demand and lead to a decline in overall vehicle sales. Additionally, subtle cost pass-throughs, such as increased destination fees, which rose by 8.5% for the 2025 model year, are being utilized to offset tariff impacts without direct price hikes. Industry leaders, including AutoNation’s CEO Mike Manley, anticipate that automakers will maintain competitive pricing on flagship models while making minor adjustments across their portfolios over time. The competitive landscape and the importance of market share are key factors influencing this gradual approach to price adjustments.

In a move that caught economists off guard, Indonesia’s central bank, Bank Indonesia (BI), slashed its benchmark interest rate by 25 basis points to 4.75% on Wednesday, marking a continuation of its easing cycle that began in September 2024. This decision, which defied the expectations of all 31 economists polled by Reuters, has sparked predictions of more aggressive monetary easing in the coming years. The rupiah responded by falling 0.5% against the U.S. dollar by midday on Thursday, while the stock index (.JKSE) reached a new all-time high, buoyed by positive growth prospects. Governor Perry Warjiyo’s notably dovish tone during the announcement has further fueled speculation of additional rate cuts, with economists now forecasting a median benchmark rate of 4% by 2026. This is a significant shift from the previous consensus of a 4.50% terminal rate by next year. BI’s easing measures, which include liquidity loosening and government bond purchases, aim to stimulate Southeast Asia’s largest economy amid growing concerns about fiscal discipline and the bank’s independence. Analysts highlight the central bank’s ‘all out pro-growth’ stance, with Maybank predicting a further 125 basis point reduction by 2026, bringing the rate to 3.50%. Meanwhile, Barclays anticipates a drop to 4.25% this year, with more cuts likely. The central bank’s decision to deepen the deposit facility rate cut by 50 basis points to 3.75% and reduce the lending facility rate by 25 basis points to 5.50% marks the first ‘asymmetric corridor’ for money market rates since 2016. Citi Research links this move to the government’s policy of transferring over $12 billion from BI to state banks, injecting liquidity into the banking system. As BI collaborates with the government to fund economic programs, the central bank’s commitment to growth remains clear, though the path ahead is fraught with challenges.

Indian edtech giant upGrad is strategically broadening its university collaborations across the Middle East and the Asia-Pacific region, responding to a significant decline in Indian students opting for U.S. and UK institutions. This shift is driven by escalating visa restrictions, rising costs, and geopolitical tensions, according to Praneet Singh, Associate Vice President of upGrad’s Study Abroad division. Founded by film producer Ronnie Screwvala and supported by Singapore’s Temasek, upGrad currently partners with approximately 80 universities in 10 countries, offering online MBAs and executive education programs. The company generates revenue by enrolling students in online courses and facilitating their transition to overseas campuses to complete degrees. Singh highlighted that prestigious U.S. and UK universities have established campuses in Dubai, Malaysia, and Singapore, prompting upGrad to follow suit. The company is actively exploring partnerships with institutions like Johns Hopkins, Carnegie Mellon, Birmingham, and Middlesex, which have campuses in Dubai or Doha, as well as universities in Vietnam, Bangladesh, Nepal, and Sri Lanka. This strategic pivot comes as Indian student applications to U.S. universities have dropped significantly, with only 47% of students choosing the U.S. in fiscal 2025, down from 60% the previous year. Factors such as stricter visa policies, weaker job prospects, and the allure of more affordable educational destinations in the Middle East and Asia-Pacific are reshaping the global education landscape. upGrad’s expansion reflects a broader trend of Indian students seeking alternatives to traditional Western education hubs.

In a recent development, Japanese oil refiners are being urged to diversify their crude oil supply sources, as 95% of Japan’s imports currently originate from the Middle East. Shunichi Kito, president of the Petroleum Association of Japan (PAJ) and head of Idemitsu Kosan, Japan’s second-largest refinery, highlighted the challenges of importing heavy Canadian crude during a press conference in Tokyo. Kito emphasized the difficulty of investing in new refining facilities due to a steady 2% annual decline in domestic oil demand, leaving the decision to individual companies. Meanwhile, Alberta, Canada’s primary oil-producing province, is exploring financial investments in Japan’s refining sector. Sources indicate that Alberta is in preliminary discussions with several Japanese refiners to potentially fund the construction of coker units, which would enable the processing of heavy crude from Alberta’s oil sands. This move aims to reduce Alberta’s heavy reliance on the United States for oil exports. While Kito acknowledged the need for diversification, he noted that no specific requests have been made to Japanese refiners yet. The initiative reflects broader global efforts to balance energy security and sustainability amidst shifting market dynamics.