Reflecting heightened global uncertainties, particularly the evolving US tariff measures, the growth forecasts represent a downward revision from AMRO’s April projections of 4.2 per cent in 2025 and 4.1 per cent in 2026 which did not include the impact of then newly announced US tariffs, AMRO said in its latest quarterly update of its flagship ASEAN+3 Regional Economic Outlook (AREO).
“Encouragingly, the ASEAN+3 region enters this period of global trade turbulence from a position of relative strength and resilience,” said Dong He chief economist at AMRO. “Most regional policymakers have acted early to cushion the impact of the trade shock, and policy space remains available for further support if needed.”
The Inflation in the region continues to moderate, despite a temporary spike in oil prices driven by Middle East tensions. The region’s financial markets have also shown resilience, with regional currencies generally appreciating against the US dollar amid growing market concerns over US policy uncertainty.
The economic outlook for ASEAN+3 remains clouded by significant uncertainties, with escalating US tariffs posing the most salient risk. Uneven progress in tariff negotiations and the potential expansion of tariffs to additional products could further disrupt trade activities and weigh on growth for the region.
The ongoing geopolitical tensions add an additional layer of complexity, while a sharper-than-expected economic slowdown in the US and Europe, along with tighter global financial conditions from prolonged high US interest rates could further dampen growth prospects, added the outlook.
“In a world that is increasingly being reshaped by fragmentation, deeper regional integration is both urgent and necessary,” added He. “By strengthening regional cooperation while maintaining openness to the world and standing firm on rules-based multilateralism, ASEAN+3 can build resilience against external shocks and create new growth opportunities.”
ALCHEMPro News Desk (SG)
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