Asia Pacific News
LAST UPDATE: July 31, 2025
BSP rate cuts to spur faster economic growth in 2026—IMF
The IMF says the Bangko Sentral ng Pilipinas has room to lower its policy rate further—citing easing U.S. tariff threats and resilient domestic conditions. The central bank cut its key rate in late July to 5.25% from 5.50%.
Insight
The IMF’s view suggests monetary moderation may drive stronger Philippine GDP in 2026 by supporting domestic demand amid manageable external risks.
Malaysia PM says Trump to attend ASEAN summit in October
Malaysian PM Anwar Ibrahim announced that U.S. President Donald Trump confirmed attendance at the 47th ASEAN Summit in Kuala Lumpur scheduled for October 26–28. A trade tariff deal with Washington was expected to be announced the following day.
Insight
Trump’s participation at ASEAN marks a diplomatic pivot and may signal U.S. efforts to deepen regional economic ties, especially as bilateral tariff negotiations loom.
Anwar Sets Malaysian Growth Plan Before Trump Unveils Trade Deal
Prime Minister Anwar unveiled a long‑term economic strategy allocating 430 billion ringgit (~US $101 billion) in development spending from 2026–2030, just ahead of an expected U.S. trade‑tariff deal.
Insight
The plan positions Malaysia for sustained investment-led growth, seeking to bolster public infrastructure and productivity before trade terms with the U.S. are finalized.
US Made Trade Deals With Thailand and Cambodia, Lutnick Says
U.S. Commerce Secretary Howard Lutnick announced that the U.S. has reached trade agreements with Thailand and Cambodia just before the August 1 tariff deadline; both countries faced steep reciprocal tariffs pending compliance.
Insight
The deals indicate Washington’s use of targeted tariff threat leverage to secure concessions, while also tying trade relief to regional stability (notably a cease‑fire between the parties).
Thailand economic growth slows in June
Thailand’s economy slowed in June 2025, with drops in industrial output, tourism revenue, and consumer spending. Export growth remained but was insufficient to offset domestic weakness.
Insight
The modest GDP forecast upgrade masks rising internal economic strain, highlighting dependence on exports amid global trade uncertainty.
Myanmar Junta Lifts Emergency Rules, Paving Way for Elections
Myanmar’s military government officially ended a years-long state of emergency, fulfilling a requirement for holding general elections scheduled in December 2025.
Insight
Although technically democratic, the move is largely seen as a political maneuver by the junta to entrench power while projecting legitimacy.
China factory activity cools as demand abroad, at home weakens
China’s manufacturing PMI fell to 49.3 in July, signaling contraction for the fourth straight month. Both export and domestic demand weakened, while employment and output dropped.
Insight
The continued industrial slowdown highlights deep structural challenges and underscores fragility in the broader recovery path.
Hong Kong central bank keeps key rate steady, tracking Fed
The HKMA held its base rate at 4.75%, following the U.S. Fed’s decision. It also intervened in FX markets to defend the local currency near the lower end of its trading band.
Insight
Tied to U.S. rate decisions, Hong Kong’s monetary policy underscores its limited flexibility under the currency peg system.
Bank of Japan Stands Pat But Raises Price Forecasts
The Bank of Japan kept interest rates unchanged but raised inflation forecasts through 2027, citing higher import costs and economic recovery signs.
Insight
The decision reflects a cautious shift toward policy normalization while recognizing persistent price pressures.
Trump says US will set 15% tariff on South Korean imports under new deal
Trump announced a revised trade deal with South Korea including a 15% tariff, down from 25%, tied to South Korea’s investment and energy import commitments.
Insight
The deal exemplifies the U.S. strategy of leveraging tariffs to extract investment pledges and reshape trade relationships.
India Weighs Options to Placate Trump After Shock 25% Tariff
India is exploring trade concessions, such as boosting U.S. imports, to respond to Trump’s surprise 25% tariff on Indian goods effective August 1.
Insight
India’s measured response aims to prevent diplomatic fallout and protect key bilateral trade flows with the U.S.
Australia’s central bank welcomes Q2 inflation data, deputy governor says
The RBA welcomed a sharp drop in Q2 inflation, raising the likelihood of a rate cut in August as the labor market softens.
Insight
Falling inflation and rising unemployment give the RBA room to ease policy, possibly marking a pivot in Australia’s monetary stance.
