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Mint
4 hours ago
- Business
- Mint
Tariff risk drives another round of Asia forecast downgrades
SINGAPORE—A fresh wave of growth forecasts for Asia highlights the threat posed by tariffs to the region, even as trade deals gather pace. The Asian Development Bank and multilateral organization Asean+3 Macroeconomic Research Office, or Amro, both lowered growth projections for major Asian economies, citing the impact of U.S. trade policy. Asia-Pacific has weathered a tough external environment this year, 'but the economic outlook has weakened amid intensifying risks and global uncertainty," said ADB chief economist Albert Park. Strong domestic demand and export front-loading supported regional economies in the first half of the year, but that momentum is expected to weaken, the Philippines-based multilateral bank said in a report Wednesday. The ADB now projects gross domestic product growth for developing Asia at 4.7%, down from April's forecast of 4.9% and the 5.1% expansion recorded in 2024. Next year, growth in developing Asia, which comprises 46 ADB members including China, South Korea and India, is forecast to slow further to 4.6%. Southeast Asia will be hit hardest by worsening trade conditions and persistent uncertainty, the ADB warned. Although several Southeast Asian nations have negotiated for lower tariffs, analysts say that won't offset the blow of high trade barriers, economic fragmentation and policy shocks. Growth in Vietnam, the first to get a deal, is still expected to slow through 2025 and 2026 as U.S. tariffs dampen export demand. The ADB cut Vietnam's GDP growth projections to 6.3% in 2025 and 6.0% in 2026, from 6.6% and 6.5%, respectively. Those who have yet to reach a compromise, such as South Korea or Taiwan, face significant 'reciprocal" tariffs on U.S.-bound exports if no agreement is reached by Aug. 1. The temporary trade truce between the U.S. and China is also set to expire in August. 'A renewed imposition of the U.S. reciprocal tariffs or a re-escalation in US-PRC [People's Republic of China] trade tensions could reduce regional growth by 0.5 to 1.4 percentage points," the ADB said. A faster deterioration in China's property market also poses a risk to regional growth, it added. China's latest batch of property data showed the sector has yet to recover, with housing prices and investment still subdued as officials struggle to revive demand. Beijing's other stimulus efforts, including for consumption, helped the economy grow in the first half of the year, but the outlook for the rest of 2025 remains challenging, the ADB said. For now, it maintains its growth forecasts for China at 4.7% this year and 4.3% in 2026. Beijing has a target of 5% for this year. Tariff pressures also led ADB to trim growth views for India to 6.5% and 6.7% in 2025 and 2026, respectively. South Korea's forecast was lowered to 0.8% this year and 1.6% the next year. Amro echoed concerns about a continued lack of clarity on Trump trade policy. 'Tariffs will likely reduce U.S. demand, increase investment uncertainty and dampen consumer confidence," the multilateral organization said. The resulting global slowdown will further impact ASEAN+3, which includes the 10 Association of Southeast Asian Nations members, plus China, Japan, and South Korea. Amro expects regional growth to slow to 3.8% this year and 3.6% next year. Under a scenario where U.S. tariffs on China revert to April 2 levels, BRICS-aligned economies face an additional 10% duty, and previously exempt goods incur a 25% levy, growth could drop below 3% next year, Amro estimates. Non-tariff protectionist measures, such as stricter investment regulations, could magnify the impact, it added.
Business Times
5 hours ago
- Business
- Business Times
US tariffs, trade tensions to slow growth in developing Asia and Pacific: ADB
[MANILA] Higher US tariffs and trade uncertainty have worsened the economic outlook for developing Asia and the Pacific, the Asian Development Bank (ADB) said in a report on Wednesday (Jul 23) as it lowered its growth forecasts for the region for this year and next. Domestic demand is expected to weaken as factors including geopolitics, supply chain disruptions, rising energy prices and uncertainty in China's property market buffer the region, the Asian Development Outlook report said. The ADB cut its 2025 growth forecast for the region to 4.7 per cent from an earlier projection of 4.9 per cent made in April. The forecast for 2026 was trimmed to 4.6 per cent, from 4.7 per cent. 'Asia and the Pacific has weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,' said ADB chief economist Albert Park. Among the sub regions, South-east Asia was expected to slow the most, with growth now projected at 4.2 per cent in 2025 and 4.3 per cent in 2026, down from earlier forecasts of 4.7 per cent for both years. 'Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment, and growth,' Park said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The ADB defines developing Asia and the Pacific as 46 economies ranging from China to Georgia to Samoa, and excluding countries such as Japan, Australia and New Zealand. The forecasts were released shortly after US President Donald Trump said that the US and Japan had struck a deal that includes a 15 per cent tariff on Japanese exports, lower than a threatened 25 per cent rate. Trump also announced a new 19 per cent tariff rate for goods from the Philippines, below the threatened 20 per cent levy flagged earlier this month but still above a 17 per cent rate announced in April. He has upended global trade flows with tariffs on nearly every trading partner, with almost all countries facing a 10 per cent tariff that took effect in April and many facing steep additional tariffs from Aug 1. AFP
Business Recorder
7 hours ago
- Business
- Business Recorder
ADB revises Pakistan's FY2025 growth to 2.7% amid uptick in industry & services
The Asian Development Bank (ADB) has revised Pakistan's GDP growth estimate for FY2025 slightly upward to 2.7%, citing stronger-than-expected performance in the industrial and services sectors. 'Pakistan provisionally grew 2.7% in FY2025 (ended 30 June 2025), resulting in the slight upward revision for FY2025, while the growth forecast for FY2026 is unchanged,' read the ADB's Asian Development Outlook (ADO) July 2025, released on Wednesday. 'The revised growth forecast in Pakistan accounted for the higher-than-expected uptick in the industry and services sector, even as the expected declines in agricultural output come to pass,' it added. Meanwhile, the report noted that easing price pressures have led to a downward revision in the country's inflation forecast for FY2025. 'In Pakistan, the accelerated decline in food and nonfood prices for the first 11 months of FY2025 revised the inflation forecast for FY2025 downward, while the outlook for FY2026 remains unchanged,'it said. Meanwhile, the ADB has lowered its growth forecasts for economies in developing Asia and the Pacific this year and next year, owing to expectations of reduced exports amid higher United States (U.S.) tariffs and global trade uncertainty, as well as weaker domestic demand. ADB forecasts the region's economies will grow by 4.7% this year, a 0.2 percentage point decline from the projection issued in April. The forecast for next year has been lowered to 4.6% from 4.7%. The multinational lender warned that prospects for developing Asia and the Pacific could be dented further by an escalation of US tariffs and trade tensions. Other risks include conflicts and geopolitical tensions that could disrupt global supply chains and raise energy prices, and a worse-than-expected deterioration in the property market of China. 'Asia and the Pacific have weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,' said ADB Chief Economist Albert Park. 'Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment, and growth.' Meanwhile, ADB has revised the growth outlook for South Asia for 2025 to 5.9%, from 6.0% in the April 2025 ADO. The slight downward revisions for GDP growth in India and Sri Lanka in 2025 are primarily due to the effects of US tariff policies, it said.
Business Recorder
8 hours ago
- Business
- Business Recorder
US tariffs, trade tensions to slow growth in developing Asia and Pacific, ADB says
MANILA: Higher US tariffs and trade uncertainty have worsened the economic outlook for developing Asia and the Pacific, the Asian Development Bank said in a report on Wednesday as it lowered its growth forecasts for the region for this year and next. Domestic demand is expected to weaken as factors including geopolitics, supply chain disruptions, rising energy prices and uncertainty in China's property market buffer the region, the Asian Development Outlook report said. The ADB cut its 2025 growth forecast for the region to 4.7% from a projection of 4.9% made in April, and the forecast for 2026 was trimmed to 4.6% from 4.7%. Trump threatens 'very severe tariffs' on Russia allies if no Ukraine deal 'Asia and the Pacific has weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,' ADB Chief Economist Albert Park said. Among the subregions, Southeast Asia is expected to slow the most, with growth now projected at 4.2% in 2025 and 4.3% in 2026, down from earlier forecasts of 4.7% for both years. 'Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment, and growth,' Park said. The ADB defines developing Asia and the Pacific as 46 economies ranging from China to Georgia to Samoa, and excluding countries such as Japan, Australia and New Zealand. The forecasts were shortly after President Donald Trump said the U.S. and Japan had struck a deal that includes a 15% tariff on Japanese exports, lower than a threatened 25% rate. Trump also announced a new 19% tariff rate for goods from the Philippines, below the threatened 20% levy flagged earlier this month but still above a 17% rate announced in April. Trump has upended global trade flows with tariffs on nearly every trading partner, with almost all countries facing a 10% tariff that took effect in April and many facing steep additional tariffs from August 1.
Hans India
9 hours ago
- Business
- Hans India
India's GDP to grow at 6.5 pc in 2025, robust 6.7 pc in 2026: ADB
The Asian Development Bank (ADB) on Wednesday said that India's GDP growth is projected to grow at 6.5 per cent in 2025, and a robust 6.7 per cent in 2026, amid strong domestic demand, a normal monsoon and monetary easing in the country. When it comes to inflation, the country is likely to clock 3.8 per cent inflation this year, followed by 4.0 per cent in 2026 -- well within the reach of the Reserve Bank of India (RBI) projections, ADB said in a statement. In India, falling food inflation also helps contain headline inflation. Consumer Price Index (CPI) inflation slid to 2.1 per cent in June, the lowest in 77 months, as food inflation turned negative. India's real GDP growth is projected to grow in a range of 6.4-6.7 per cent this fiscal, reinforcing the country's position as the fastest-growing major economy in the world, the Confederation of Indian Industry (CII) said earlier this month. Meanwhile, the Asian Development Bank lowered its growth forecasts for economies in developing Asia and the Pacific this year and next year. The downgrades are driven by expectations of reduced exports amid higher US tariffs and global trade uncertainty, as well as weaker domestic demand. ADB forecasts the region's economies will grow by 4.7 per cent this year, a 0.2 percentage point decline from the projection issued in April. The forecast for next year has been lowered to 4.6 per cent from 4.7 per cent, according to Asian Development Outlook (ADO) July 2025. Prospects for developing Asia and the Pacific could be dented further by an escalation of US tariffs and trade tensions. Other risks include conflicts and geopolitical tensions that could disrupt global supply chains and raise energy prices, and a worse-than-expected deterioration in the property market of the People's Republic of China (PRC). 'Asia and the Pacific have weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,' said ADB Chief Economist Albert Park. 'Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment, and growth,' Part mentioned. Growth projections for the PRC, the region's largest economy, are maintained at 4.7 per cent this year and 4.3 per cent next year. Economies in Southeast Asia will likely be hardest hit by worsened trade conditions and uncertainty. ADB now predicts the subregion's economies will grow 4.2 per cent this year and 4.3 per cent next year, down roughly half a percentage point from April forecasts for each year.
