Asia-Pacific economies are facing significant external pressures in Q3 2025, primarily due to uncertain US tariff policies and reduced imports from China, according to a report by S&P Global Ratings. Whilst domestic demand is expected to remain robust, the resilience of regional economies will differ, with export-dependent countries being more vulnerable.
The report, titled “Economic Outlook Asia-Pacific Q3 2025: Resilience May Vary,” highlights the impact of rising US tariffs on China, which are likely to affect the country’s exports, investment, and growth. Louis Kuijs, S&P Global Ratings Asia-Pacific Chief Economist, stated, “The rise in US tariffs on China—and uncertainty about them—will weigh on the country’s exports, investment and growth.”
Despite these challenges, domestic demand growth is anticipated to be more resilient than exports, as policymakers in the region have pledged to implement measures to boost it. However, these measures have been modest so far. S&P forecasts China’s GDP growth at 4.3% in 2025 and 4.0% in 2026, which, although below government targets, is considered solid given the external pressures.
The report notes that economies less reliant on goods exports, such as India and the Philippines, will benefit from resilient domestic demand, limiting economic slowdown. In contrast, export-dependent economies like Malaysia, Singapore, South Korea, Taiwan, and Vietnam are expected to experience a significant slowdown in 2025.
This analysis underscores the varied economic resilience across the Asia-Pacific region, influenced by external factors and domestic policy responses. The full report is available to RatingsDirect subscribers.
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