#Singapore #AMRO #US Tariffs #ASEAN Economic

Economic Outlook for ASEAN+3 Amid US Tariff Uncertainty

The ASEAN+3 Macroeconomic Research Office (AMRO) has recently released its economic forecast for the ASEAN+3 region, projecting growth of 3.8% for 2025 and 3.6% for 2026. These figures reflect a downward adjustment stemming from global uncertainties, particularly due to evolving US tariff measures which have reshaped trade dynamics in the region. This forecast comes as a significant revision from earlier predictions made in April, which estimated growth at 4.2% for both years.

Impact of US Tariffs

The newly introduced US tariffs are shifting the economic landscape for ASEAN+3 countries, previously unaccounted for in earlier projections. AMRO Chief Economist Dong He noted that the region is entering a critical period of global trade turbulence from a position of relative economic strength. Policymakers in the region are taking proactive steps to mitigate the adverse effects of these tariffs, ensuring that economic resilience remains a priority.

Despite challenges, regional financial markets have exhibited robust performance, with currencies generally gaining against the US dollar. Even with a temporary rise in oil prices due to geopolitical tensions in the Middle East, inflation in the ASEAN+3 region is beginning to moderate, signaling a potentially stabilizing economy.

Emerging Risks and Geopolitical Tensions

However, the road ahead is fraught with uncertainties. The ongoing geopolitical tensions not only complicate the trade scenarios but are coupled with concerns regarding a sudden economic slowdown in the United States and Europe. Additionally, continued high-interest rates in the US could pose significant risks to global financial stability and subsequently dampen growth prospects across ASEAN+3 nations.

In light of these conditions, calls for deeper regional integration have gained momentum. Dr. He emphasized the urgency and necessity for ASEAN+3 nations to unify their efforts and strengthen regional cooperation. This approach is viewed as essential for countering external shocks and leveraging new growth opportunities that arise from the evolving global landscape.

Looking Ahead

As of now, the AMRO demonstrates optimism regarding the readiness of ASEAN+3 countries to absorb and respond to these challenges, but continuous adaptation will be vital. Their upcoming quarterly update, set for release in October 2025, will further assess the evolving economic conditions and implications for regional cooperation.

ASEAN+3 is expected to proceed with a focus on maintaining openness globally while adhering to principles of multilateralism. By fostering closer economic ties and working synergistically, member nations aim to bolster their resilience and harness varied growth potential as they navigate this challenging terrain. The necessity for a unified response has never been clearer; the stakes are high, and the need for collaboration is immediate.

The AMRO report serves as both a warning and a guide, highlighting the fragile state of the region's economic environment while also shedding light on pathways for resilience through integrated efforts. For a more comprehensive analysis, readers can refer to the full July quarterly update of AMRO's ASEAN+3 Regional Economic Outlook report.

About AMRO

The ASEAN+3 Macroeconomic Research Office (AMRO) plays a pivotal role in promoting macroeconomic stability among ASEAN+3 members, which include the 10 countries of the ASEAN along with China, Japan, and Korea. Established to provide surveillance, support financial arrangements, and offer technical assistance, AMRO is instrumental in facilitating cooperative efforts for ensuring a harmonized economic future.

For more updates, visit AMRO’s official website or follow them on LinkedIn.