Trade tensions between the U.S. and China have hit business and consumer confidence — and that’s a bigger challenge to overcome right now compared to any economic damage inflicted by new tariffs, according to the chief executive of Southeast Asia’s largest bank.
“The bigger challenge is really the psychological challenge,” Piyush Gupta, CEO of DBS Group Holdings, told CNBC’s Martin Soong on Thursday.
“The fact that people are more uncertain about where this is going creates a degree of lower confidence and that results — whether it’s the credit spreads or the stock market — in animal spirits in the region coming off,” he added.
“Animal spirits” is a term coined by economist John Maynard Keynes to describe confidence driven by human emotions.
The banking business, including that of DBS, relies to some extent on confidence to do well, Gupta said. He added that “unfortunately, there’s not too much you can do about that and so you have to go with the cycle on that one.”
