Bank of Canada cuts interest rates, warns of adverse tariff war impact

The Bank of Canada has cut its benchmark interest rate by 25 basis points to 3% and has lowered its economic growth projections due to concerns over a potential tariff war triggered by the United States (US). US President Donald Trump plans to impose a 25% tariff on all imports from Canada, which could have significant economic consequences for the country. The central bank warns that a prolonged trade war would be detrimental to Canada's economic activity. If Canada and other countries retaliate with 25% tariffs against the US, Canada's economic growth could decline by 2.5 percentage points in the first year and 1.5 percentage points in the second year. However, this is still a hypothetical scenario and not an official projection. This is the sixth consecutive rate cut, as inflation remains within the target range but economic growth is weak. The bank stated that the decision to lower the policy rate further was influenced by inflation being around 2% and the presence of economic oversupply.

https://internasional.kontan.co.id/news/bank-of-canada-pangkas-suku-bunga-peringatkan-dampak-perang-tarif-yang-merugikan

Spain's economy to grow 3.2% in 2024, surpassing the Eurozone

Spain's economy experienced a stronger-than-expected growth of 3.2% in 2024, surpassing official forecasts and outperforming other countries in the eurozone. The growth was driven by a surge in tourism, increased agricultural production, and higher exports. The Spanish government plans to raise its growth projection for this year from 2.4% due to the robust economic performance. Analysts expect the growth to remain strong in the coming years, supported by rising public consumption, falling unemployment, increased investment, and immigration. Immigration has helped address labor shortages and contributed to a 16-year low in the unemployment rate. However, despite the positive economic growth, the rising cost of living and the housing crisis have put pressure on people's standard of living, leading to concerns about affordability and accessibility in major cities.

https://internasional.kontan.co.id/news/ekonomi-spanyol-tumbuh-32-pada-2024-lampaui-zona-euro

Alibaba Releases Qwen 2.5 AI Model, Claims Superior to DeepSeek

Alibaba Group has released an updated version of its artificial intelligence (AI) model called Qwen 2.5, asserting its superiority over competitors such as DeepSeek-V3. The launch took place during the Lunar New Year holiday period, indicating intense competition among Chinese technology companies. Alibaba's cloud unit asserts that Qwen 2.5-Max outperforms other AI models, including GPT-4o, DeepSeek-V3, and Llama-3.1-405B from OpenAI and Meta. This release follows the successful introduction of the DeepSeek AI assistant and the R1 model, which has had a significant impact on the industry, raising questions about the high costs associated with leading US AI companies. DeepSeek's success has prompted domestic rivals, including ByteDance (the parent company of TikTok), to accelerate their AI developments. ByteDance has claimed that its updated AI model surpasses OpenAI's o1 in the AIME benchmark test, which measures an AI's ability to comprehend and respond to complex instructions.

https://internasional.kontan.co.id/news/alibaba-rilis-model-ai-qwen-25-klaim-lebih-unggul-deepseek

DeepSeek Plunges Nvidia Shares, Trump Considers Tightening Chip Exports to China

The Trump administration is considering tighter restrictions on sales of Nvidia's H20 chips, which are designed for the Chinese market.Discussions about restricting shipments of these chips to China are still in the early stages among Trump officials and have been under consideration since the Biden administration.The H20 chip is capable of running AI software and is designed to comply with existing US restrictions on shipments to China. However, concerns are growing that China is gaining ground in AI development, especially after DeepSeek China recently launched a free assistant that requires less data and costs less than existing models.The topic of restricting sales of Nvidia's chips has been discussed for several months among high-level officials, according to Lennart Heim, a researcher at RAND.Nvidia has expressed its willingness to cooperate with the administration's approach to AI.

https://internasional.kontan.co.id/news/deepseek-rontokkan-saham-nvidia-trump-pertimbangkan-pengetatan-ekspor-chip-ke-china