Insider spotlight:
In the latest ASEAN+3 Regional Economic Outlook 2025 report released last week, AMRO flagged the potential drag on regional growth caused by the April 2 tariff announcement by the US government.
Thirteen of the fourteen ASEAN+3 member economies are subject to some of the highest effective tariff rates under the new measures, with a trade-weighted average of 26 percent excluding China.
“Nevertheless, ASEAN+3 economies today are more resilient and diversified than during past global shocks and better positioned to navigate the unfolding tariff shock,” said AMRO chief economist Hoe Ee Khor.
The ASEAN+3 region groups together the 10 member states of the Association of South East Asian Nations and the Northeast Asian countries of China, Japan and South Korea.
Prior to the US policy shift, regional growth was projected to exceed 4.0 percent in both 2025 and 2026, driven by domestic demand and recovering investments. However, under the “Liberation Day” tariff scenario, growth could fall below 4.0 percent in 2025 and dip to 3.4 percent in 2026, AMRO said.
The shifting trade environment is expected to weaken export momentum, disrupt supply chains, and increase market volatility. Despite these headwinds, AMRO noted that most ASEAN+3 governments retain sufficient fiscal and monetary policy flexibility to support growth and maintain stability.
Exports to the US have been declining as a share of ASEAN+3’s total shipments, falling to 15 percent in 2024 from 24 percent in 2000. Intraregional trade and domestic consumption now play a larger role in sustaining economic activity.
Looking ahead, AMRO emphasized the need for structural reforms and productivity improvements. “Reinvigorating structural reforms and enhancing productivity are critical to unlocking the region’s untapped growth potential,” said Allen Ng, AMRO group head for regional surveillance.
— Edited by Daxim L. Lucas
