Aurelia Butler

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SEOUL (Reuters) -South Korea’s opposition-controlled parliament on Tuesday passed a government budget bill for 2025 that was slashed from the government’s proposal and triggered President Yoon Suk Yeol’s short-lived martial law decree last week. The 300-member parliament voted 183-94 to pass a 673.3 trillion won ($470.60 billion) budget for 2025, which was cut by the Democratic Party from the government’s proposed 677.4 trillion won budget without reaching agreement with the ruling People Power Party and the government. It was the first time the parliament passed a budget trimmed down without consent from government ministries or between rival parties. Lawmakers would need finance ministry consent to make any upward revisions in government spending for the following year.”A swift passage of the bill will help resolve the current unease and crisis,” Democratic Party Leader Lee Jae-myung said. The government says the budget cut will paralyse basic government functions, hinder responses to external challenges and delay policy measures for small businesses and vulnerable citizens. President Yoon cited opposition obstructionism over government budgets as one justification for his martial law decree on Dec. 3, which triggered a constitutional crisis in Asia’s fourth largest economy.Senior Democratic Party lawmaker Park Chan-dae said if the government needed money for “spending for people’s livelihoods, it can be solved later through an extra budget”.The Democratic Party says cuts were mostly in reserve funds for the government, interest costs and funds allocated to the presidential office, prosecutors and auditors for classified operations.Parliament Speaker Woo Won-shik said it was regrettable the government was uncooperative during the consultation process and he asked it to prepare a supplementary budget draft for 2025. Economists said the reduction in the government budget was a setback for the economy, which narrowly avoided a technical recession in the third quarter amid a slowdown in exports and a weak recovery in domestic demand. “It is not good news for the economy at a time when it needs fiscal policy to be expansionary. It will create a policy vacuum and makes a supplementary budget next year look almost certain,” said Park Sang-hyun, an economist at iM Securities. Citi analysts estimate the opposition’s fiscal spending cut would lower economic growth by around 0.02 percentage points over a year. South Korea’s economic growth is expected to slow to 1.9% in 2025 and 1.8% in 2026, after rising by 2.2% this year, according to the Bank of Korea. ($1 = 1,430.7200 won) More

Oracle (NYSE:ORCL) released its fiscal second-quarter results after the close of trading Monday, and its stock is seen trading sharply lower after its numbers fell short of Wall Street estimates despite ongoing AI-led demand for cloud infrastructure.Oracle reported revenue of $14.06 billion in the second quarter, up 9% from a year ago, but below estimates of $14.11 billion, as per data compiled by LSEG.Wall Street expectations for AI-linked firms have been high as they bet on the technology to be a strong growth driver in the future. The company has been pouring billions into upgrading its cloud infrastructure, and while Oracle has seen healthy growth in its cloud segment, it also has to compete with heavyweights such as Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) in the field.Still, Oracle remains optimistic about the future, with chief executive Safra Catz stating total Oracle cloud revenue should top $25 billion in fiscal 2025. The company’s shares have soared over 80% so far this year, but are seen falling around 8% in premarket trading.US stock futures slipped marginally lower Tuesday, with traders wary of investing at these elevated levels ahead of the release of key inflation data. By 04:10 ET (08:10 GMT), the Dow futures contract was down 23 points, or 0.1%, S&P 500 futures dropped 5 points, or 0.1%, and Nasdaq 100 futures fell by 30 points, or 0.2%.The major indices fell Monday, with the S&P 500 and Nasdaq Composite retreating from the fresh record highs seen at the end of last week.Trading is likely to be relatively quiet Tuesday, as the major event this week is Wednesday’s release of the November US consumer price index report, which could influence the Federal Reserve’s thinking in terms of interest rates at its meeting next week.Oracle will be in the corporate spotlight after the tech giant released results after the close Monday [see above], while results are also expected from the likes of GameStop (NYSE:GME) and Dave & Buster’s Entertainment (NASDAQ:PLAY).Taiwan Semiconductor Manufacturing (NYSE:TSM) posted another impressive quarter, as the world’s biggest contract chipmaker reported a sharp year-on-year increase in revenue through November on strong AI-fueled demand. TSMC’s net revenue rose 34% from last year, resulting in year-to-date revenue growth of 31.8%, increasing slightly from the prior month. TSMC has seen an exponential jump in revenue over the past year on increasing demand from the fast-growing artificial intelligence industry. However, doubts have begun to grow over just how long this growth can be sustained, given that data centre building and demand for new chips is expected to slow eventually.This data added some fuel to the fire as the November reading showed that revenue fell 12.2% from October’s number.TSMC is a key supplier to AI major Nvidia (NASDAQ:NVDA), and recently said it expects demand to remain robust going into 2025. Ashtead (LON:AHT) is heading across the pond.The British equipment rental firm plans to move its primary listing to New York from London, adding to the growing number of European companies that are choosing US listings, expecting valuations to be higher.Ashtead has already made large inroads into the American market, starting with the acquisition of Sunbelt Rentals in 1990, with the region now accounting for the vast majority of its revenue and profit. The group, which rents out equipment in the construction, repair, entertainment and emergency response segments, is the second-largest equipment rental company in the US with 1,215 stores in all 50 states.Ashtead expects the plan to be implemented in the next 12-18 months, after it has consulted with its shareholders.The group also warned of lower annual profit due to a weak commercial construction market in the United States.Crude prices stabilized Tuesday after the previous session’s healthy gains, as traders assessed the turmoil in the Middle East as well as the Chinese economic outlook. By 03:10 ET, the US crude futures (WTI) dropped 0.1% to $68.33 a barrel, while the Brent contract traded largely flat at $72.14 a barrel.Oil prices rose over 1% on Monday, boosted by China’s top political body raising hopes for more stimulus measures as well as heightened geopolitical tensions in Syria.However, concerns have since eased about the fallout from Syrian President Bashar al-Assad’s overthrow, with Syria’s rebels working to form a government and restore order.Turning back to China, the country’s Central Economic Work Conference, which is set to begin on Wednesday, is now expected to provide more insight into planned stimulus after Beijing said it will “vigorously” support local consumption at the start of the week.In a positive sign, China’s crude oil imports jumped in November from a year earlier in the first annual growth in seven months, data showed earlier Tuesday. More

Prabowo, who took office in October, told his ministers and government officials that such tensions are expected to slow the growth of the world’s major economies, without mentioning any country although citing a “military emergency” as an example.”We cannot tolerate leaks, heavy spending, things that do not address the problems of our people, that aren’t productive,” he said, calling for fewer ceremonial events and seminars.”Tensions, wars, heavy competition between major powers … this causes economic uncertainties.”On Tuesday, Prabowo also presided over a launch of an application for state agencies to procure products which he said could make state spending more efficient.About 3,621 trillion rupiah ($228.31 billion) has been allotted in the state budget for government spending next year, which represents an increase of 6% over this year, with the budget deficit forecast at 2.53% of the country’s gross domestic product, lower than this year’s outlook of 2.7%.Prabowo has long touted his aim to accelerate Indonesia’s economic growth to 8%, from 5% now, by developing industries that process the country’s rich natural resources and relying on the economic impact of his flagship programmes, such as giving students free school meals.During the speech, Prabowo also called for a more targeted subsidy scheme and to make sure all subsidies reach the poor.($1 = 15,860.0000 rupiah) More

The VDMA said it anticipated production would decline by 8% and 2% in real terms in 2024 and 2025 respectively, unchanged from its previous forecast, as it warned of intensifying competition in China and new challenges in the U.S. from Trump’s presidency.”A growing number of companies is no longer able to adequately cushion production through their order backlogs in the face of sharply declining orders,” VDMA President Bertram Kawlath said in a statement.Kawlath added that falling interest rates are likely to benefit consumption as well as boost investment and trigger an economic recovery next year, but that he expected no dramatic upturn as conflicts, protectionism and structural breaks weigh on global economy. More

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By Swati BhatMUMBAI (Reuters) – Restoring a balance between inflation and growth in India remains an important task for the Reserve Bank of India (NS:BOI), the outgoing central bank governor, Shaktikanta Das, said.”The inherent potential of the Indian economy to grow is very much there,” Das said, ahead of leaving office later on Tuesday.A day earlier, India appointed career civil servant Sanjay Malhotra as the new central bank governor in a surprise move that has left markets guessing about the future direction of monetary policy.Financial markets had expected Das to be handed an unprecedented second extension as his term ended on Tuesday.Malhotra’s appointment at the RBI’s helm comes at a time when economic growth has slowed and inflation has risen.   GDP growth in the September quarter slowed to 5.4%, its weakest in seven quarters, and inflation rose to above the central bank’s 6% tolerance band in October for the first time in over a year.At last week’s policy review, the central bank left interest rates unchanged, but reduced the cash reserve ratio that banks are required to hold in order to ease monetary conditions and support growth.”I think growth is impacted by multiplicity of factors, not just one factor of the repo rate,” Das said.”Our effort has been to follow and make monetary policy as appropriate as possible, keeping in mind the prevailing conditions and the overall outlook.” (This story has been refiled to add attribution in paragraph 1) More