New Delhi, Nov 25 (IANS) Much of the Asia-Pacific region is expected to grow solidly in the first quarter of 2025, although China will take a big hit due to the challenges posed by the new US administration to be headed by Donald Trump, according to an S&P Global report released on Monday.
Higher US tariffs on Chinese exports would make other Asian economies more competitive in the US and they may attract more foreign direct investment, including from US firms, said the report.
It stated that a gradual fall in interest rates and inflation should ease their drag on spending power, allowing growth to pick up in 2025 in several Aia-Pacific economies. In emerging markets, robust domestic demand growth is generally supporting solid overall growth, even as it is moderating in some.
While much of the Asia-Pacific region should be able to continue to grow solidly, central banks will probably remain cautious by not reducing their policy rates too fast. The impending change in the US administration will be challenging for China and the rest of Asia-Pacific.
“US tariff increases have become more likely, especially on China, and possible changes in the U.S. macro picture are leading to different interest rate expectations. And risks have gone up due to slower global demand and US trade policy,” the report pointed out.
According to the S&P report, swings in capital flows driven by shifts in expectations about U.S. interest rates and trade policies require central banks to be vigilant and cautious. “We expect Asia-Pacific central banks to take their time bringing policy rates down”.
While China’s stimulus measures should support growth, we expect its economy to be hit by US trade tariffs on its exports. While China’s GDP growth has been projected at 4.1 per cent in 2025, India is expected to grow at a more robust 6.8 per cent during 2025.
The change of administration in the US implies a large degree of uncertainty around the baseline. That is true for US growth, inflation and interest rates, with implications for the rest of the world. In addition, the potential for new trade restrictions and trade conflicts has risen, the report said.
“We now see fewer US Federal Reserve interest rate cuts in 2025. We expect one more in December. But we now see only three cuts in 2025 and think the terminal level of 3 per cent-3.25 per cent will be reached only in late 2026. We expect the policy rate to reach the terminal level of 2.5 per cent already in the first quarter of 2025,” the report stated.
–IANS
sps/na
Disclaimer
The information contained in this website is for general information purposes only. The information is provided by TodayIndia.news and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Through this website you are able to link to other websites which are not under the control of TodayIndia.news We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, TodayIndia.news takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
For any legal details or query please visit original source link given with news or click on Go to Source.
Our translation service aims to offer the most accurate translation possible and we rarely experience any issues with news post. However, as the translation is carried out by third part tool there is a possibility for error to cause the occasional inaccuracy. We therefore require you to accept this disclaimer before confirming any translation news with us.
If you are not willing to accept this disclaimer then we recommend reading news post in its original language.
