Latest news with #ASEAN+3RegionalEconomicOutlook
Barnama
23-07-2025
- Business
- Barnama
ASEAN+3 Growth Forecast Trimmed Amid Tariff Risks, But Outlook Seen Remaining Resilient
BUSINESS By Nur Ashikin Abdul Aziz SINGAPORE, July 23 (Bernama) -- The ASEAN+3 region is projected to grow at 3.8 per cent in 2025 and 3.6 per cent in 2026, according to the latest ASEAN+3 Regional Economic Outlook (AREO) quarterly update by the ASEAN+3 Macroeconomic Research Office (AMRO). ASEAN+3 refers to the ASEAN member states plus China, Japan, and South Korea. AMRO chief economist Dong He said that although these projections represented a downward revision from the April forecast, primarily due to the impact of rising US tariffs, the region continues to demonstrate fundamental resilience, supported by proactive policy responses. 'Encouragingly, the ASEAN+3 region enters this period of global trade turbulence from a position of relative strength and resilience. Most regional policymakers have acted early to cushion the impact of the trade shock, and policy space remains available for further support if needed,' he said in a statement on the release of the report. AMRO said the economic outlook remains clouded by significant uncertainties, with escalating US tariffs posing the most salient risk. 'Ongoing geopolitical tensions add layer of complexity, while a sharper-than-expected economic slowdown in the US and Europe, coupled with prolonged high US interest rates, could further dampen growth prospects,' it noted. On a more positive note, inflation across the region continues to moderate, despite a temporary spike in oil prices driven by tensions in the Middle East. Financial markets have also shown resilience, with regional currencies generally appreciating against the US dollar amid growing market concerns over US policy uncertainty. Meanwhile, Dong He emphasised the urgency of deeper regional integration to build resilience against external shocks and create new growth opportunities. 'ASEAN+3's collective economic weight - representing nearly one-third of global GDP - combined with deepening regional integration and established crisis management frameworks, provides a robust foundation for navigating current global challenges,' he told Bernama. He also highlighted the critical role of the Plus Three economies in underpinning ASEAN regional dynamics. 'China's accommodative policies and role as the region's largest final demand market provide important stability for ASEAN supply chains,' he said, adding that Japan and South Korea remain key technology providers and major investors in the region.
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.
