Latest news with #ASEAN-5
New Straits Times
12-08-2025
- Business
- New Straits Times
US tariffs may have little impact on Asean inflation
KUALA LUMPUR: The higher United States (US) import tariffs, which may result in elevated US-centric inflation, may have little impact on ASEAN's price pressures. RHB Investment Bank Bhd (RHBIB) said in a note that the inflation pressures have been largely muted across key ASEAN economies. In its latest reports, the investment bank has swiftly downgraded inflation forecasts for Malaysia (2.0 per cent, from 2.2 per cent), Singapore (1.2 per cent, from 1.6 per cent) and Thailand (0.3 per cent, from 0.6 per cent), while keeping Indonesia's relatively benign inflation outlook (2.0 per cent). "We note that inflation momentum on a year-on-year (y-o-y) perspective has softened markedly, except for Indonesia, as key commodity prices such as food and energy have declined. "Separately, import prices on a month-on-month (m-o-m) basis for Malaysia and Singapore are negative, underlining the relative tame inflation environment for ASEAN," it said. The results came following an Ordinary Least Squares (OLS) calculation on the dependent variable: US export price against the independent variable: US import price, which suggests that every one point of increase in the import price index would lift US export prices by 0.902 points. Meanwhile, RHBIB noted that the imposition of US-led tariffs is reshaping global trade flows. ASEAN, with its competitive labour markets, strategic location, and improving infrastructure, is increasingly becoming a central player in this evolving landscape. In the case of Malaysia, the country enjoys strong economies of scale in its semiconductor manufacturing and export industries. Malaysia is the world's sixth-largest exporter of semiconductors, and accounts for 13 per cent of the global market for semiconductor assembly, testing, and packaging, thus suggesting a sizeable market presence and dominance in global chips. Importantly, over 95 per cent of its semiconductor exports to the US originate from American firms operating within Malaysia. This entrenched integration of Malaysian facilities into US supply chains, especially by industry leaders such as Intel and Texas Instruments, suggests that significant disruption would be counterproductive to US manufacturing goals. Separately, Malaysia's electrical and electronics products (E&E) exports are well diversified across trading regions - the economy has a foothold in E&E exports in China plus Hong Kong (HK), ASEAN-5 (Indonesia, Malaysia, Philippines, Singapore, and Thailand) and the European Union (EU), with trade surpluses seen in electrical machinery, telecommunications, specialised machinery and general industrial machinery. "However, with increasing US trade protectionist policies, one must ponder a world where trade dependencies and linkages may evolve in a world without US dominance," it said. In a world without the US as a central player in global trade, it said the structure of international trade dependencies would undergo a profound transformation. Many countries would seek alternative sources for products once heavily imported from the US, including agricultural goods, pharmaceuticals and high-tech electronics. For instance, nations previously dependent on US grain and soybean exports may turn to Brazil or Argentina. At the same time, digital infrastructure and electronics supply could increasingly shift toward China, South Korea or the EU. This shift would accelerate the regionalisation of trade, with intra-regional linkages becoming more prominent as countries prioritise stability, proximity and political alignment in their economic relationships. In Asia, for example, trade within ASEAN and with China would intensify, supported by mechanisms like the Regional Comprehensive Economic Partnership (RCEP).
Barnama
23-07-2025
- Business
- Barnama
US Tariffs Could Drag ASEAN-5 GDP Growth To 1.5 Pct In 2026 -- Economist
US Tariffs Could Drag ASEAN-5 GDP Growth To 1.5 Pct In 2026 -- Economist KUALA LUMPUR, July 17 (Bernama) -- ASEAN-5 gross domestic product (GDP) growth is projected to fall to just three per cent in 2025 and as low as 1.5 per cent in 2026 if knock-on effects from the United States (US) tariffs continue, said Bloomberg Southeast Asia economist Dr Tamara Mast Henderson. This compares with the 4.5 per cent growth figures in 2024, Henderson said, adding that the knock-on effects include reduced investment flows, weakening exports and declining business confidence. ASEAN-5 economies are Indonesia, Malaysia, the Philippines, Singapore and Thailand. "More of the disruptive effects will be coming from investments in 2025, less so from exports," she said, as cited by CIMB Securities Sdn Bhd in a note on Wednesday. Henderson also noted that foreign direct investment (FDI) would face increased competition in the region, as the US ramps up efforts to bring manufacturing and production back onshore, with investor flows expected to be increasingly diverted away from Southeast Asia. "This re-shoring push will likely 'suck up' capital that would otherwise have gone to developing Asian markets, creating tough competition for remaining FDI," she said. She is concerned that Malaysia will be in a precarious position, with 7.5 per cent of its GDP derived from exports to the US, and overall exports representing more than two-thirds of its economy. "The country faces a 25 per cent tariff, and owing to its close ties with China — including several memoranda of understanding (MoUs) and its participation in BRICS-related initiatives — these tariffs are unlikely to be lowered," she opined. Other than trade shocks, Malaysia's crude oil production has been slowing over the years. This is an added negative to the softening oil prices, which will dent government revenues and scope to support the domestic economy. "Malaysia's key export sector, electrical equipment, is particularly vulnerable," she said. Henderson projects Malaysia's GDP growth to fall below four per cent in 2025, with even weaker GDP growth possible in 2026 should tariffs remain in place. As for the US, she said the world's largest economy is also expected to suffer economically, as the higher tariff regime will increase input costs, reduce domestic demand, and lead to slower GDP growth. "Additionally, it will limit the Federal Reserve's ability to cut interest rates in the short term, creating a difficult macro policy environment," she said. -- BERNAMA
Nikkei Asia
25-06-2025
- Business
- Nikkei Asia
ASEAN is no longer a passive recipient of global investment capital
Malaysian Prime Minister Anwar Ibrahim delivers his speech as he officiates the ASEAN Investments Conference in Kuala Lumpur, Malaysia April 8, 2025. © Reuters Dai Kadomae, CFA, CPA, is a Thailand-based strategic finance adviser and former CFO with 25+ years of cross-border M&A and capital market experience. Capital has been quietly flowing out of Southeast Asia. In 2024 alone, the region's five key emerging economies -- Indonesia, Vietnam, Thailand, Malaysia and the Philippines (sometimes collectively referred to as ASEAN-5) -- recorded net financial account outflows exceeding $4 billion, marking a structural break from nearly a decade of steady inflows. Since 2017, these ASEAN-5 economies have experienced a persistent decline in portfolio investment, based on balance of payments data from central banks and International Monetary Fund reports. Meanwhile, their once-resilient current account surpluses have begun to erode in the wake of COVID-19, exposing them to growing liquidity stress -- amplified by the Trump administration's stop-start trade policies.
The Star
23-04-2025
- Business
- The Star
IMF cuts Malaysia 2025 GDP to 4.1% on regional slowdown
KUALA LUMPUR: The International Monetary Fund has downgraded Malaysia's real gross domestic product (GDP) growth forecast for 2025 to 4.1 per cent, from 4.7 per cent previously, reflecting a broader downward revision across the region. In its April 2025 World Economic Outlook, titled "A Critical Juncture amid Policy Shifts", the fund also projected Malaysia's economy to expand by 3.8 per cent in 2026. The IMF trimmed its global growth forecast for 2025 to 2.8 per cent, down 0.5 percentage point from its January estimate. Among Malaysia's regional peers, the IMF cut Indonesia's 2025 outlook to 4.7 per cent from 5.1 per cent. The Philippines is now expected to grow by 5.5 per cent, down from 6.1 per cent, while Thailand's forecast was revised to 1.8 per cent from 2.9 per cent. The fund said major policy shifts were reshaping the global trade landscape and reigniting uncertainty, once again testing the global economy's resilience. "Since February, the United States has announced multiple waves of tariffs against trading partners, some of which have invoked countermeasures. "Markets initially took the announcements mostly in stride, until the United States' near-universal application of tariffs on April 2, which triggered historic drops in major equity indices and spikes in bond yields, followed by a partial recovery after the pause and additional carve-outs announced on and after April 9,' it said. The IMF reiterated that the global economy is at a critical juncture, with signs of stabilisation emerging through much of 2024, after a prolonged and challenging period of unprecedented shocks. "Inflation, down from multidecade highs, followed a gradual though bumpy decline toward central bank targets. Labour markets normalised, with unemployment and vacancy rates returning to pre-pandemic levels,' it added. On productivity, the IMF noted widening discrepancies, as manufacturing activity continues shifting from advanced economies to emerging markets. Industrial production plunged in all countries at the onset of the pandemic. The recovery paths, however, have been decisively different. Production has soared in China and has also expanded in smaller European Union economies and the ASEAN-5 (Indonesia, Malaysia, the Philippines, Singapore, Thailand), whereas it has struggled to return to pre-pandemic levels in Japan and the largest EU countries,' it added. Meanwhile, the IMF said industrial production in the United States has rebounded more strongly than in other advanced economies. On commodities, the IMF projected fuel prices to fall by 7.9 per cent in 2025, led by a 15.5 per cent drop in oil prices and a 15.8 per cent fall in coal prices. These declines are expected to be partially offset by a 22.8 per cent rise in natural gas prices, driven by colder-than-expected weather and the cessation of Russian gas flows to Europe via Ukraine since January. Non-fuel commodity prices are forecast to increase by 4.4 per cent in 2025. - Bernama
![[UPDATED] IMF cuts Malaysia 2025 GDP to 4.1pct on regional slowdown](/_next/image?url=https%3A%2F%2Fassets.nst.com.my%2Fimages%2Farticles%2FIMF_1745378731.jpg&w=3840&q=100)
New Straits Times
23-04-2025
- Business
- New Straits Times
[UPDATED] IMF cuts Malaysia 2025 GDP to 4.1pct on regional slowdown
KUALA LUMPUR: The International Monetary Fund has downgraded Malaysia's real gross domestic product (GDP) growth forecast for 2025 to 4.1 per cent, from 4.7 per cent previously, reflecting a broader downward revision across the region. In its April 2025 World Economic Outlook, titled "A Critical Juncture amid Policy Shifts", the fund also projected Malaysia's economy to expand by 3.8 per cent in 2026. The IMF trimmed its global growth forecast for 2025 to 2.8 per cent, down 0.5 percentage point from its January estimate. Among Malaysia's regional peers, the IMF cut Indonesia's 2025 outlook to 4.7 per cent from 5.1 per cent. The Philippines is now expected to grow by 5.5 per cent, down from 6.1 per cent, while Thailand's forecast was revised to 1.8 per cent from 2.9 per cent. The fund said major policy shifts were reshaping the global trade landscape and reigniting uncertainty, once again testing the global economy's resilience. "Since February, the United States has announced multiple waves of tariffs against trading partners, some of which have invoked countermeasures. "Markets initially took the announcements mostly in stride, until the United States' near-universal application of tariffs on April 2, which triggered historic drops in major equity indices and spikes in bond yields, followed by a partial recovery after the pause and additional carve-outs announced on and after April 9," it said. The IMF reiterated that the global economy is at a critical juncture, with signs of stabilisation emerging through much of 2024, after a prolonged and challenging period of unprecedented shocks. "Inflation, down from multidecade highs, followed a gradual though bumpy decline toward central bank targets. Labour markets normalised, with unemployment and vacancy rates returning to pre-pandemic levels," it added. On productivity, the IMF noted widening discrepancies, as manufacturing activity continues shifting from advanced economies to emerging markets. Industrial production plunged in all countries at the onset of the pandemic. The recovery paths, however, have been decisively different. Production has soared in China and has also expanded in smaller European Union economies and the ASEAN-5 (Indonesia, Malaysia, the Philippines, Singapore, Thailand), whereas it has struggled to return to pre-pandemic levels in Japan and the largest EU countries," it added. Meanwhile, the IMF said industrial production in the United States has rebounded more strongly than in other advanced economies. On commodities, the IMF projected fuel prices to fall by 7.9 per cent in 2025, led by a 15.5 per cent drop in oil prices and a 15.8 per cent fall in coal prices. These declines are expected to be partially offset by a 22.8 per cent rise in natural gas prices, driven by colder-than-expected weather and the cessation of Russian gas flows to Europe via Ukraine since January. Non-fuel commodity prices are forecast to increase by 4.4 per cent in 2025.
