April Newsletter

What happened in March?

The volatile U.S. Stock Market: The U.S. stock market rally is over. The market plummeted on March 13th due to political and economic uncertainty, closing 10% lower than just three weeks before. Investors are now (re)directing their investments into safer assets, resulting in record-high gold prices. U.S.-based technology companies, in turn, have seen notable decreases in their share prices. Investor confidence is influenced by the potential impact of the quick, sometimes unexpected policies of the Trump administration, and potential discrepancies between his words and actions. Volatility was dismissed by U.S. treasury secretary, dismissing the issue as the short-term consequence of the transition to an economy with less government spending. This may have been an attempt to reassure investors of the stock market’s performance and downplay the possibility of a recession. The stock market saw a rise after that but has since experienced a decline in light of the deepening trade war which is set to disrupt global supply chains, increase consumer prices in the U.S. and potentially slow economic growth in various sectors of the economy. 

International aid for Myanmar: On the 28th of March, Myanmar and its neighbour Thailand were hit with a 7.7 magnitude earthquake and a 6.4 magnitude aftershock. The catastrophe has killed more than 1,000 people with an estimate of casualties to rise to 100,000. The economic impact of the earthquake is estimated to be 70% of the country’s GDP of US$66.76 billion. Various countries have mobilised substantial aid for Myanmar, which suffered the worst impact. South Korea and the United States have each committed US$2 million, while the UK has pledged US$12 million and China has contributed US$13.8 million. Though Myanmar is located in a seismically active region, earthquakes of this severity are uncommon. Additionally, the country has been hit with multiple natural disasters in recent years, increasing its vulnerability when responding to the crisis. Moreover, the country has been in a civil war since 2021. With a military junta in power, concerns have emerged regarding the effective utilisation of international aid.

The Economic Impact of Ramadan: While some studies note temporary productivity shifts due to fasting adjusted working hours and reduced entry to the labour market, the economic impact varies significantly by region and industry. Many sectors benefit from people’s habit changes during Ramadan and the redistribution of GDP across sectors. Retail, consumer goods and hospitality industries tend to increase their sales during the month. For example, in Egypt, food expenditure increases by 50-100%. Activity during nighttime hours increases electricity and media consumption, too, and the transportation sector benefits from Eid-related travel. Importantly, even though fasting can be a strain on the human body, research shows that Ramadan impacts positively on subjective well-being, with individuals reporting greater happiness, life satisfaction, and improved work-life balance during this period.

Happiness in the World: Finland has been ranked first in the World Happiness Report (WHR) for the 8th year in a row as of March 20th. The WHR is a UN-backed study that examined countries’ life satisfaction using multiple measures, including GDP per capita, quality of life and education. A surprising finding from the report is that indicators of social support show a stronger correlation with people’s life satisfaction ratings than per capita GDP. This explains why happiness in some wealthy countries, like the U.S. is declining while some Southern American countries, like Brazil and Mexico, report higher levels of happiness than the countries’ GDPs would indicate. 

What to watch out for in April?

China’s shift towards a consumption economy: China’s economy relied heavily on exports and investments in the past. The country’s government has for a long time been seeking ways to transform the economy towards consumption, but the need for this shift has increased due to declining sources of demand: Investments are low due to China’s ongoing property slump and exports are expected to decline due to substantial rises anticipated in the U.S. tariffs. Meanwhile, China’s consumer confidence has not recovered from the Covid-19 pandemic levels. On March 16th, the country’s government published a unique action plan to increase consumption, including financial aid and subsidies to demographics most likely to spend, as well as incentives to reduce saving, like subsidies for consumer credit for responsible borrowers. The plan also encourages companies to allow their workers to take their paid holidays, in hopes of giving them leisure time to use for activities that increase consumption. Moreover, the government included measures to boost more niche sectors of the economy with high growth potential, like drones and small aircraft occupying lower altitudes, economic activities tied to the ageing population and winter tourism in Northern China. However, these proposals need fiscal resources to make them successful. 

Note.  Figure showing China’s retail sales growth in trillions of yuan from 2017-2025. Sales declined sharply in 2020, at the start of the COVID-19 pandemic. They’ve since recovered and continued to grow, but remain persistently below the pre-pandemic levels, indicating weaker consumer spending.

EU Defence Spending: European leaders are looking to increase countries’ defence spending. This comes off the back of pressure from the United States and its threats to reduce aid for Ukraine. EU countries may need to fill that gap. The spending boost increased EU defence stock prices as well as the stock prices of companies in related industries, like aerospace. It is expected to boost the European economy more broadly as well. However, expected increases in government debt issuance to fund military spending increased bond yields. Growth and borrowing cost increases set off two opposing forces of inflation, making it harder to predict. Moreover, the possible trade war with the U.S. adds yet another variable of uncertainty.

 

Sources: 

  • https://www.investopedia.com/dow-jones-today-03132025-11696062
  • https://www.reuters.com/markets/global-markets-wrapup-1-2025-03-28/
  • https://www.koreatimes.co.kr/www/nation/2025/03/113_395209.htmlhttps://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=MMhttps://www.reuters.com/graphics/MYANMAR-QUAKE/gkvljjmwyvb/https://www.economist.com/asia/2025/03/28/myanmars-earthquake-piles-misery-on-civil-warhttps://civil-protection-humanitarian-aid.ec.europa.eu/where/asia-and-pacific/myanmarburma_enhttps://myanmar-now.org/en/news/international-aid-flows-to-myanmar-after-devastating-quake/
  • https://www.thenationalnews.com/uae/2024/03/26/ramadans-economic-impact-is-not-what-matters-say-gulf-experts/https://www.tbsnews.net/features/tbs-ramadan/how-ramadan-makes-economy-stronger-604874https://www.theguardian.com/business/economics-blog/2015/jul/03/cost-ramadan-counted-muslim-fasting-monthhttps://www.alhakam.org/a-brief-economic-analysis-of-ramadan/https://www.hlb.global/the-economic-impact-of-ramadan-on-the-food-sector/
  • https://www.economist.com/finance-and-economics/2025/03/17/can-anything-get-chinas-shoppers-to-spend

Editor: Alexandra Digby

Author: Ada-Sofia Karoliina Kari

View all Blog posts