China economy to top $19.5 trillion this year: planner
The size of China’s economy will exceed 140 trillion yuan ($19.5 trillion) this year, the head of the state planner said as policymakers look to steer the country beyond the current five-year policy plan, which concludes at the end of 2025.
The world’s second-largest economy is grappling with a prolonged trade war with the United States and persistent deflationary pressures.
“Looking back at the 14th five-year plan period, the challenges encountered were greater than expected, but the achievements exceeded expectations,” Zheng Shanjie, chair of the National Development and Reform Commission, said at a press conference.
Zheng highlighted progress made under the 2021–2025 five-year plan, which focuses on key priorities such as economic development, technological innovation, green transformation, and improvements in people’s livelihoods.
In its 14th five-year plan released in 2021, China dropped a specific gross domestic product growth target for 2021–2025, but has continued to set annual growth targets during the plan period, with the goal for 2025 set at around 5 percent.
The economy grew at an average annual pace of 5.4 percent from 2021 to 2024, despite the impact of COVID-19, official data showed.
Singapore to take ‘risk-proportionate approach’ in maintaining status
Singapore will take a “risk-proportionate” approach in maintaining its status as a trusted financial centre, as opposed to a “zero-risk” approach, says Chee Hong Tat, Minister for National Development and deputy chairman of the Monetary Authority of Singapore (MAS).
“If we are overly kiasu, I think we will not be able to capture new opportunities,” adds Chee, who was speaking at a doorstop with media during his visit to DBS Bank on July 9.
The Minister’s remarks come after the MAS slapped composition penalties totalling $27.45 million to nine financial institutions for anti-money laundering and countering the financing of terrorism (AML/CFT) requirements on July 4.
When asked what the considerations were when meting the penalties, Chee said that the central bank factored in the severity of the offences and actions required in a fair and objective manner.
“It’s not whether it is a local or international financial institution, but it is about what the nature and extent and the severity of the lapses and offences that have been committed,” he shares.
Sri Lanka gross forex reserves drop in June : analysis
Sri Lanka’s foreign exchange reserves dropped 206 million US dollars to 6,080 million US dollars in June 2025, amid warnings that the last rate cut was risky to the country’s ability to collect reserves and repay debt.
Sri Lanka’s central bank bought 119.3 million US dollars from banks in June and sold 7.3 million dollars, indicating that monetary policy was not fundamentally inflationary.
Though the central bank had run exceptional deflationary policy since around September 2022, after India stopped giving loans to intervene for imports and print money, concerns have been raised since the last quarter as private credit picked up.
Sri Lanka was driven to serial currency crisis purely with aggressive macro-economic policy (rate cuts/sterilized forex sales), a frenzy of foreign borrowings and eventual Latin America style default by targeting a mid-corridor rate and potential output under flexible or discretionary inflation targeting. Sri Lanka’s gross official reserves have not grown since October 2024. In the last quarter the central bank printed large volumes of money through open market operations, to target a mid-corridor or single policy rate, triggering an abundant reserve regime in the first red flag.
US-India Trade Deal
Negotiations for a U.S.-India trade deal have been progressing at breakneck pace, as officials rush to reach an agreement before President Donald Trump’s July 9 tariff deadline. India being near the front of the line is surprising, given that the two countries have consistently imposed high trade barriers and haven’t signed a deal despite years of discussions.
But Delhi is ready to negotiate because it sees an even bigger geoeconomic play: undercut China’s status as a leading manufacturing hub and destination for investment by securing key supply chains and investing in advanced technologies. To seal the deal, Washington and Delhi should put economic security issues at the heart of the agreement.
Getting to yes will require overcoming a long history of nos. In 2019, the U.S. removed India from the Generalized System of Preferences (GSP) program, and India imposed retaliatory tariffs on 28 U.S. goods in response to earlier Section 232 tariffs on steel and aluminum. While mutual tech and defense cooperation increased during the Biden administration, and India joined the non-trade pillars of the Indo-Pacific Economic Framework, there was little progress in improving market access apart from the removal of previous tariffs and resolution of WTO disputes.
Malaysia central bank lowers key rate to 2.75 pc
Malaysia’s central bank cut its benchmark interest rate MYINTR=ECI for the first time in five years on Wednesday, as it looks to support the economy amid a weaker growth outlook and rising uncertainty in global trade.
Bank Negara Malaysia lowered its overnight policy rate (OPR) by 25 basis points to 2.75 percent from 3.00 percent, where it had been since May 2023, as had been expected by 17 of 31 economists surveyed in a Reuters poll.
The ceiling and floor rates of the OPR corridor are correspondingly reduced to 3 percent and 2.5 percent respectively, the central bank said in a statement.
The rate decision came a day after U.S. President Donald Trump announced a 25 percent tariff on Malaysian exports to the United States.
BNM said the global growth outlook was weighed down by uncertainties surrounding tariffs, as well as geopolitical tensions, which could lead to greater volatility in global financial markets and commodity prices.
While the Malaysian economy was on a strong footing, the central bank said external uncertainties could affect Malaysia’s growth prospects.
“The reduction in the OPR is… a pre-emptive measure aimed at preserving Malaysia’s steady growth path amid moderate inflation prospects,” the central bank said.
Economists had expected at least one 25-basis-point cut this year, which would hold until the end of 2026, though there was no consensus on where the rate would be then. Estimates for the end of next year ranged from 2.25 percent to 3.00 percent.
Indonesia retains 3rd place on global Islamic economy index
Indonesia placed third in the State of the Global Islamic Economy (SGIE) Indicator 2024–2025 report released by research and advisory firm DinarStandard, marking a steady climb over the past decade.
“I would like to congratulate Indonesia for maintaining the third position,” a partner at DinarStandard, Reem El Shafaki, said at the global launch of the SGIE Report 2024–2025 here on Tuesday.
The SGIE 2024–2025 highlights seven key sectors of the global Islamic economy, namely halal food, Islamic finance, Muslim-friendly tourism, modest fashion, halal cosmetics, pharmaceuticals, as well as media and recreation.
In the first five years after the indicator was introduced in the 2014–2015 SGIE Report, Indonesia had ranked 10th and 11th.
The country rose to fifth place in 2019–2020, then remained in fourth place for two consecutive report periods from 2020–2022.
In the 2023–2024 report and the latest 2024–2025 report, Indonesia placed third.
“In addition (to the third place), Indonesia has occupied the first position in the modest fashion indicator, second place in Muslim-friendly tourism, and second place in pharmaceuticals and cosmetics,” El Shafaki said.
Indonesia also ranked fourth in halal food, sixth in Islamic finance, and seventh in media and recreation.
In terms of investment, Indonesia has surpassed all other member countries of the Organisation of Islamic Cooperation (OIC) in the number of deals.
In 2023, Indonesia completed 40 transactions valued at US$1.6 billion, establishing itself as a leading hub of halal economy investment.
Large-scale investment in the Islamic economy sector by the Indonesian government has boosted local halal food production, reduced reliance on imports, and strengthened the supply chain.
“Such a great achievement, and I congratulate you (the Indonesian government) on all the efforts made through the institutions, policies, strong (economic) ecosystem, and strong start-up ecosystem, as evident from the results,” El Shafaki added.
Tax in Japan 2025
As if Japan’s economy weren’t having a rotten enough 2025, Donald Trump just upped the pressure exponentially with a 25 percent tariff.
The same day Tokyo got disastrous news from Washington, data showed that real wages in Japan fell the fastest in 20 months in May. The 2.9 percent year-on-year drop marks the fifth consecutive month in which wages fell.
This is bad news on a number of levels. Not least of which is that 2025 was supposed to be the year Japan’s long-coveted virtuous cycle finally arrived to hasten consumer spending and broader economic growth.
In spring 2024, unions scored the biggest wage increase in 33 years — 5.28 percent. By year-end, though, the increase failed to materialize. Wages ended 2024 essentially flat. Then came US President Trump’s trade war, which is making wage gains even less likely. Might wage cuts now be the question?
The 25 percent import tax that Trump just slapped on Japan, effective August, will be layered on top of his 25 percent auto tariff.
“If the high tariffs persist, negative effects on exports and capital investment will be unavoidable,” says Takeshi Yamaguchi, chief Japan economist at Morgan Stanley MUFG.
As much as this is a loss for Japan, the return of “Tariff Man” is a win for China. Japan isn’t alone this week. Trump hit close US ally South Korea with a 25 percent wallop, while his administration shocked Southeast Asia with outsize tariffs. He slapped a 32 percent tax on Indonesia, 36 percent on Cambodia, 40 percent on Laos, 40 percent on Myanmar.
Nepal’s Business News in a Nutshell
Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s current economic landscape presents a complex interplay of progress and persistent vulnerabilities. While macroeconomic indicators such as a Rs 491.44 billion balance of payments surplus, a record-high monthly remittance of Rs 176 billion, and a decline in inflation to 2.72 percent point to improving financial stability and consumer relief, the marginal NEPSE index dip and weather-induced setbacks in hydropower and agriculture highlight ongoing structural and environmental challenges.
Investment momentum continues in key sectors like hydropower and banking, with projects like the Kalika Gandaki Hydropower securing major funding and IPOs actively progressing. However, issues such as incomplete infrastructure in tourist zones, stalled industries like the Shree Ram Sugar Mill, and devastating hail damage in Jumla underline gaps in execution, disaster preparedness, and rural economic resilience.
Overall, Nepal is showing cautious economic optimism, but sustained growth will depend on bridging policy implementation gaps and addressing climate and governance risks.
UK, Maldives Likely on PM Modi’s Itinerary Later in July
If PM Modi began the month of July by embarking on a five-nation tour to Africa, the Caribbean and South America, he’s likely to end the month by visiting the UK and the Maldives.
Sources say PM Modi is likely to visit the UK in the last week of July, where the signing of the long-negotiated India-UK Free Trade Agreement (FTA) is on the table. This would mark Modi’s first official interaction with his British counterpart Keir Starmer whose government took office earlier this year.
In May this year, PM Modi had announced the conclusion of negotiations on the FTA that was under discussion since 2022. As reported earlier by StratNews Global, the deal is expected to unlock bilateral trade opportunities across sectors such as legal services, healthcare, green energy, financial technology and manufacturing. The agreement is being seen as a post-Brexit milestone for the UK and a gateway for India to deepen its economic footprint in Europe.