Deutsche Bank-Asia Macro Insight Last-Minute Push Before August 1st-116743575

T2se3r0Ot6kwoPaT2se3r0Ot6kwoPaDistributed on: 23/07/2025 05:52:10 GMTDistributed on: 23/07/2025 05:52:10 GMT23 July 2025Deutsche BankResearch Asia Economics Asia Macro Insight Date For Asian economies that have reported their Q2 GDP, export front-loading drove outperformance relative to expectations. We continue to expect an export payback in the second half (2H) of the year, weighing on overall growth. Trade deals announced thus far suggest that the average US tariff rate for Asia could double from the current 10% baseline, especially when pending sectoral tariffs on semiconductors and pharmaceuticals are taken into account.Asia's growth slowdown may be more than a mere technical payback, with the relative difference in US tariff rates also resulting in greater divergence in performance within the region. Vietnam may outperform, while the opposite may hold true for Thailand given additional political headwinds. Risks to China remain balanced, assuming an extended truce with the US. Pressure is on the South Korean government to deliver a deal similar to Japan's 15% agreement, while India's deal remains pending, and its central bank may be considering another rate cut.Central banks in Asia have largely discounted recent positive economic data, with many recently opting to ease monetary policy (BI, BNM, BSP, and RBI) and/or maintain a dovish bias (BoK, BoT and MAS), signaling further easing to come. The BoT is likely to deliver another 75 bps rate cut, followed by 50 bps rate cuts by BI, BoK, and SBV, with BSP potentially following suit.Figure 1: Frontloading may have already ended-20-100102030405020182019202020212022202320242025% yoyUS goods tradeExportsImportsSource : Deutsche Bank Research, Haver AnalyticsFigure 2: Q2 GDP growth surpassed expectations0.92.00.82.11.12.31.43.301234CNMY*SGVN*% QoQ saQ2 GDP growthBloomberg ConsensusActual* implied from YoYSource : Deutsche Bank Research, Bloomberg Finance LP, Haver AnalyticsOverview …………………………..……1China….......................................................2Hong Kong…...............................................6India….........................................................8Indonesia…...............................................12Malaysia…................................................14Philippines….............................................16Singapore…..............................................18South Korea..............................................20Sri Lanka...................................................22Taiwan……...............................................24Thailand…................................................26Vietnam…................................................28Asia's response to reciprocal tariffs….....30DB Macro Forecasts..................................35Growth & Inflation Heatmap……..........36EM Asia Macro Charts…..........................37EM Asia Monetary Policy Monitor…........39Juliana LeeChief Economist+65-6423-5203Kaushik DasChief Economist+9