Asia Pacific News
LAST UPDATE: September 3, 2025
IMF downgrades Cambodia’s economic growth forecast to 4.8 pct in 2025
The IMF has lowered its 2025 growth forecast for Cambodia to 4.8%, citing mounting trade tensions and unresolved border disputes with Thailand as key risk factors.
Insight
The downgrade reflects heightened vulnerabilities in Cambodia’s export-oriented economy, notably from diplomatic tensions, which could undermine investor confidence.
China’s services activity growth hits 15-month high in August, private PMI shows
In August, China’s services activity expanded at its fastest rate in 15 months according to the private-sector RatingDog PMI, which rose to 53.0. The composite PMI also climbed, signaling improved domestic demand and export orders, though thin profit margins remain a concern.
Insight
The robust performance in services suggests a shift toward services-led recovery amid broader economic fragility, offering a potential stabilizing force.
Japan Sees Record $822 Billion Budget Request on Defense, Debt
Japanese ministries and agencies have submitted a record-high budget request totaling ¥122.4 trillion (about $822 billion) for the next fiscal year, reflecting soaring debt-servicing needs and a substantial increase in defense spending.
Insight
The budget underscores Japan’s growing fiscal pressure and priority shift toward bolstering national defense amid regional security concerns.
Japan’s Ishiba Meets With Ueda to Discuss Economy, Markets
Prime Minister Shigeru Ishiba met with Bank of Japan Governor Kazuo Ueda to discuss economic conditions, exchange rates, and financial markets. The BOJ reiterated its policy stance: it will raise interest rates if economic and price improvements align with its outlook.
Insight
The meeting reflects ongoing government-central bank coordination on monetary policy amid yen volatility and domestic economic pressures.
Trump Says Not Considering Lowering Tariffs on India Imports
U.S. President Donald Trump stated he is not considering lowering the recently doubled 50% tariffs on Indian imports, criticizing India’s historically high levies on American goods.
Insight
Trump’s continuation of tariff pressure underscores persistent tension in U.S.–India trade relations and complicates prospects for a bilateral trade deal.
Indian ministers set to meet on landmark consumer tax overhaul
Indian state and federal ministers are convening for a two-day meeting to discuss a sweeping GST overhaul, including cuts on over 400 items and consolidation into just two rates—5% and 18%—with increased taxes on luxury goods. The reform is expected to cost around $21 billion in revenue.
Insight
The overhaul signals a push to stimulate consumption and simplify taxation before festive season, but balancing fiscal revenue with stimulus will be politically sensitive.
Thai Political Crisis Deepens as Rivals Aim to Block Leader Bids
Thailand’s political crisis intensified as rival parties maneuvered to block each other’s bids for prime minister following the ousting of Paetongtarn Shinawatra by the constitutional court. The crisis complicates leadership formation amid coalition fragmentation.
Insight
Prolonged instability could delay budget implementation and dampen economic recovery, highlighting how political turmoil undermines governance and investor confidence.
Bank of Thailand Governor Sees Economic Risks in Political Drift
Bank of Thailand Governor Sethaput Suthiwartnarueput warned that political deadlock may delay the 2026 budget, weighing on growth and limiting fiscal support. Monetary policy room is constrained with already low rates.
Insight
Prolonged instability could derail recovery and undermine policy effectiveness, showing how political uncertainty translates into macroeconomic risks.
Singapore MAS survey shows economists lift GDP forecast, see steady policy
Economists in MAS’s quarterly survey raised Singapore’s GDP outlook for 2025 and expect monetary policy to remain unchanged at the next review.
Insight
The improved forecast highlights resilience in the economy, while the expectation of steady policy reflects caution amid global headwinds.
Indonesia Turns to Central Bank for Burden Sharing Agreement
Bank Indonesia agreed to share debt costs with the government to support President Prabowo’s programs, including housing and cooperatives, though details remain limited.
Insight
The deal shows deeper fiscal-monetary coordination but raises concerns over central bank independence and inflation risks.
Australia’s Economy Accelerates Driven by Household Spending
Australia’s GDP grew faster in Q2, driven mainly by household consumption, supported by looser monetary policy.
Insight
Household demand is boosting short-term growth, but structural issues like low productivity remain challenges for sustainability.
