Latest news with #ASEAN+3MacroeconomicResearchOffice
Barnama
a day ago
- Business
- Barnama
ASEAN Economies To Maintain Growth Above 4 Pct Despite Global Challenges -- AMRO Economist
BUSINESS By Nur Ashikin Abdul Aziz SINGAPORE, July 23 (Bernama) -- ASEAN economies are expected to maintain growth above four per cent despite a challenging global environment, with projections at 4.4 per cent in 2025 and 4.2 per cent in 2026, according to ASEAN+3 Macroeconomic Research Office (AMRO) chief economist Dong He. He said the moderate downward revision from AMRO's April forecast was primarily due to the impact of US tariffs. 'Nevertheless, it is important to reiterate that despite these challenges, ASEAN's fundamental strengths -- its dynamic domestic markets, deepening regional integration and proven crisis management capabilities -- position it well to weather this storm,' he told Bernama. He explained that the region's sustained growth was underpinned by three factors -- robust domestic demand, a more diversified economic base, and policy space to respond. He noted that several central banks had already eased monetary policy, while governments had implemented targeted fiscal measures to support affected sectors. However, significant downside risks remain for the region, including the continued unpredictability of US protectionist policies, with the tariff landscape having evolved significantly since April 2. He said that under an adverse scenario of further escalation, AMRO estimates ASEAN growth could drop below three per cent in 2026, the weakest growth since the Global Financial Crisis, excluding the pandemic years. The scenario includes BRICS-aligned economies facing an additional 10 per cent tariff, and previously exempt sectors such as semiconductors and pharmaceuticals are hit with a 25 per cent tariff.
Barnama
a day ago
- Business
- Barnama
Malaysia's Economy Remains Resilient Amid Global Headwinds
BUSINESS By Nur Ashikin Abdul Aziz SINGAPORE, July 23 (Bernama) -- Malaysia's economy continues to demonstrate resilience in 2025, underpinned by strong domestic demand, robust investment activity, and favourable labour market conditions, despite pressures from global trade tensions and policy uncertainty. ASEAN+3 Macroeconomic Research Office (AMRO) chief economist Dong He stated that if the United States' reciprocal tariffs take effect from August 1 at the current rate of 25 per cent, Malaysia's GDP growth could fall from 5.1 per cent in 2024 to 4.2 per cent in 2025, and further to 3.8 per cent in 2026. 'This reflects the direct impact on Malaysia's exports to the US, the indirect effects through intermediate goods sent to other countries destined for the US, and the broader slowdown in global trade growth. Nonetheless, domestic demand will remain the key driver of growth,' he told Bernama. He noted that front-loaded exports had supported economic momentum earlier in the year. At the same time, key sectors such as information and communication technology and manufacturing remain active, bolstered by data centre investments and industrial diversification. However, the outlook for the second half of the year and beyond remains clouded by external headwinds, particularly the outcome of ongoing US trade negotiations. To maintain momentum, He said Malaysia's policy priorities should include sustained diplomatic engagement with the US on trade issues, diversification of export markets, and greater emphasis on the services sector, which is typically less exposed to protectionist measures. He added that accelerating structural reforms remains essential, especially through the implementation of the New Industrial Master Plan 2030 and the National Energy Transition Roadmap. 'Regionally, the Johor-Singapore Special Economic Zone (JS-SEZ) could emerge as a strategic advantage, catalysing cross-border investment and innovation.
Fibre2Fashion
10-05-2025
- Business
- Fibre2Fashion
US tariffs hit Cambodia's growth outlook; AMRO calls for reforms
Cambodia's economic growth is set to slow to 4.9 per cent in 2025, down from 6.0 per cent in 2024, as sharp US tariffs weigh on the country's key garment exports, according to the ASEAN+3 Macroeconomic Research Office (AMRO). Growth is forecast to ease further to 4.7 per cent in 2026. The AMRO mission, led by principal economist Dr Jinho Choi, with policy discussions involving AMRO director Kouqing Li and chief economist Hoe Ee Khor, assessed Cambodia's macroeconomic outlook, vulnerabilities, and policy recommendations, AMRO said in a release. 'Due to the sharp rise in tariffs on its goods export to the US, Cambodia's economic growth is expected to decelerate to 4.9 per cent in 2025 and 4.7 per cent in 2026. However, the economy is resilient and the government should take targeted measures to support the economy, especially the affected sectors,' said Dr Choi. Inflation in 2024 was highly volatile. Although the consumer price index averaged just 0.8 per cent in 2024, inflation spiked in early 2025 and is forecast at 2.7 per cent for the year before moderating to 2.2 per cent in 2026, returning to pre-pandemic levels. The current account surplus narrowed to 0.5 per cent of GDP in 2024, shifting into a deficit of 3.6 per cent in 2025, widening further to 5.5 per cent in 2026. Foreign direct investment inflows are projected to decline in 2025 amid investor caution before recovering in 2026. AMRO highlighted that as a small, open economy; Cambodia remains highly vulnerable to external shocks, compounded by domestic financial sector vulnerabilities and long-term structural challenges. The most pressing concern is the uncertainty over the duration and magnitude of new US tariffs, currently under a 90-day review. Prolonged trade protectionism could significantly depress global growth, impacting Cambodia through investment and trade channels. In the longer term, Cambodia's graduation from least developed country status in 2029 poses additional challenges to export competitiveness and borrowing costs. AMRO urged Cambodia to adopt a multifaceted policy approach to strengthen resilience. In the short term, targeted fiscal support and flexible monetary policies should sustain economic activity, while regional cooperation must be enhanced to boost bargaining power and foster intra-regional trade. Medium-term priorities include export diversification and improving domestic competitiveness. Swift implementation of the revenue mobilisation strategy is critical to addressing the budget shortfalls seen in 2023 and 2024. The National Bank of Cambodia should maintain an accommodative monetary stance to support liquidity and economic growth but ensure that regulatory forbearance measures addressing NPLs are time-bound to prevent moral hazard. Strengthening financial stability frameworks—including the establishment of a deposit insurance scheme, banking resolution mechanisms, and crisis management frameworks—is urgently required. AMRO commended the Cambodian government's commitment to fostering high-quality, sustainable, and inclusive growth but stressed that achieving this vision requires concrete, well-implemented policies to support underperforming sectors, enhance competitiveness, and accelerate economic diversification. Cambodia's growth is set to slow to 4.9 per cent in 2025 and 4.7 per cent in 2026 due to US tariffs, AMRO said. Inflation will rise to 2.7 per cent in 2025 before easing. AMRO urged targeted fiscal support, monetary easing, and export diversification. Financial stability frameworks and swift revenue reforms are also critical to boosting resilience. Fibre2Fashion News Desk (HU)
Korea Herald
21-04-2025
- Business
- Korea Herald
ASEAN+3 Positioned for Resilience Amid Unprecedented Trade Shocks
SINGAPORE, April 21, 2025 /PRNewswire/ -- The ASEAN+3 Macroeconomic Research Office (AMRO) today released its annual flagship report, the ASEAN+3 Regional Economic Outlook (AREO) 2025, highlighting the region's resilience and policy capacity to withstand unprecedented global trade shocks following the US administration's sweeping tariff announcement on April 2. These tariffs mark a sharp escalation in trade protectionism and have introduced heightened uncertainty far exceeding market expectations. "The announcement of elevated and broad-based tariffs by the US, and the developments since, have added significant layers of complexity to the ASEAN+3 region's outlook," said AMRO Chief Economist Hoe Ee Khor. "Nevertheless, ASEAN+3 economies today are more resilient and diversified than during past global shocks and better positioned to navigate the unfolding tariff shock." The ASEAN+3 region faces a disproportionate impact from the US tariff measures. 13 out of the 14 member economies are subject to some of the highest effective tariff rates in the April 2 announcement, with a trade-weighted average estimated at 26 percent excluding China. These rates remain fluid and will likely evolve further in the coming months. These tariffs and the uncertainty generated by the constant shifts in policies are expected to weaken trade momentum, disrupt supply chains, and increase financial market volatility. Still, the ASEAN+3 regional outlook is underpinned by resilient fundamentals. Prior to the announcement of the "Liberation Day" tariffs, AMRO had projected the region to grow above 4.0 percent in 2025 and 2026, supported by robust domestic demand, recovering investment, and low, stable inflation. However, the US tariff measures have introduced considerable uncertainty. Under the initial Liberation Day scenario, regional growth could slip below 4.0 percent in 2025 and weaken further to 3.4 percent in 2026. These preliminary projections are subject to significant uncertainties, as the US administration continually adjusts its tariff measures in response to market reactions and counter measures by trading partners. While these trade shocks will weigh on ASEAN+3, the region is entering this period from a position of relative strength and resilience. ASEAN+3 economies possess ample policy space to cushion near-term shocks. Many governments have the fiscal capacity to deliver targeted support to vulnerable sectors and sustain domestic demand. Central banks in the region have room to ease monetary policy in view of the low and well-anchored inflation rates, and can deploy macroprudential tools and liquidity facilities to safeguard financial stability. Over the years, regional economies have become more balanced, with domestic demand and intraregional trade emerging as key drivers of growth. Moreover, the region is now supported by a more diversified export market. The region's share of exports to the US has declined steadily over the years. Exports to the US now make up just 15 percent of gross exports, compared to about 24 percent in 2000. Deepening intraregional trade and rapidly expanding domestic markets have reduced dependency on any single export market. Continued progress in regional integration and trade diversification will further strengthen the region's ability to weather global turbulence. As the region responds to these near-term risks, it should continue to aim at achieving development goals to revitalize its declining long-term growth and further build resilience to external shocks. Allen Ng, AMRO Group Head for Regional Surveillance, said: "Reinvigorating structural reforms and enhancing productivity are critical to unlocking the region's untapped growth potential. Accelerating digitalization, embracing green transitions, and boosting productivity, can help ASEAN+3 sustain resilient, high-quality growth." Key medium to long-term priorities include upgrading industrial capabilities, diversifying into renewable energy industries and markets, narrowing investment gaps, strengthening institutional capacity, increasing services productivity, and deepening integration in areas such as services and digital trade. Despite today's uncertain environment, the region has demonstrated its ability to endure and adapt. As Khor concluded: "ASEAN+3 has proven its remarkable resilience time and again in the face of global shocks. In this volatile trade landscape, unity and coordinated action will be essential." The full AREO 2025 report is available on the AMRO website. The ASEAN+3 Macroeconomic Research Office (AMRO) is an international organization established to contribute toward securing macroeconomic and financial stability of the ASEAN+3 region. AMRO's mandate is to conduct macroeconomic surveillance, support regional financial arrangements, and provide technical assistance to the members. In addition, AMRO also serves as a regional knowledge hub and provides support to ASEAN+3 financial cooperation.
Bloomberg
15-04-2025
- Business
- Bloomberg
Tariffs Drag AMRO Asia Growth Outlook to Weakest Since Covid
US President Donald Trump's global tariffs would cut Asia's economic growth to the weakest since the Covid-19 pandemic, according to a regional research group. If America's so-called reciprocal levies are implemented, growth across Asia would slow to 3.8% this year and 3.4% next year, according to the ASEAN+3 Macroeconomic Research Office. The 2025 estimate includes Trump's 'Liberation Day' charges on all nations that he subsequently paused, but not the recently announced temporary exemption for certain products including smartphones and electronics.
