Asia Pacific News
LAST UPDATE: July 1, 2025
India Remains Key Driver of Global Growth, RBI’s Malhotra Says
The Reserve Bank of India’s Deputy Governor Malhotra reaffirmed India’s role as a major engine of global economic growth, attributing it to strong domestic demand, inflation control, and healthy financial buffers.
Insight
Malhotra’s remarks highlight India’s solid macroeconomic fundamentals, though global uncertainties—such as geopolitical tensions and weather shocks—pose potential downside risks.
Indian officials extend US visit to iron out trade deal, sources say
Indian trade negotiators have prolonged their stay in Washington in a last-minute push to finalize a trade deal before the July 9 U.S. tariff sunset deadline.
Insight
The extension shows high-level political will on both sides, but sticking points remain in agriculture and dairy sectors, indicating that a trade-off between protectionism and growth support is still being negotiated.
Indian banks’ gross bad loan ratio to remain close to multi-decade lows, RBI report says
According to the RBI’s June 30 Financial Stability Report, the gross non-performing asset (NPA) ratio is expected to remain around 2.3%, rising modestly to 2.5% by 2027—levels reminiscent of historical lows.
Insight
The banking sector remains robust, underpinned by strong capital adequacy and proactive provisioning. However, rising delinquencies in credit cards and microfinance sectors hint at emerging risks in unsecured lending.
China Sticks to Stainless‑Steel Levies Despite Indonesia Pain
China has decided to extend anti-dumping and countervailing duties on stainless-steel imports—including those from Indonesia—for another five years to protect domestic steel producers.
Insight
Beijing’s decision reflects a strategic choice to shield its steel industry from global price volatility, despite potential friction with exporter countries and possible trade retaliation.
China Home Sales Slump Persists as Calls Grow for More Stimulus
Housing data for June show that China’s property sales continue to decline, prompting economists to advocate for broader stimulus from policymakers to stabilize the market.
Insight
The ongoing slump in real estate underscores deeper structural issues, signaling that incremental policy measures may be insufficient, and authorities might need to consider more expansive fiscal and monetary interventions.
China’s Envoy Urges Australia to Resist US Pressure on Military Spending
China’s ambassador to Australia, Xiao Qian, has publicly urged Canberra not to be “incited” by NATO’s call—led by the U.S.—to significantly increase defense spending, painting such demands as politically motivated (bloomberg.com).
Insight
The envoy’s intervention reveals Beijing’s strategic use of diplomacy to counter U.S. influence in the region. By framing NATO-led defense boosts as unnecessary and economically harmful, China seeks to drive a wedge between Australia and its Western allies.
Trade risks to keep shrinking Australia’s resources earnings, report says
Australia’s Department of Industry reports that mining and energy export revenues will fall—to A$385 bn in 2024–25, then A$369 bn in 2025–26 and A$352 bn in 2026–27—due to trade barriers, softer commodity prices, and weaker demand .
Insight
The forecast underscores Australia’s vulnerability to global trade friction—especially U.S. tariffs—and highlights the need to diversify its export base beyond iron ore and LNG. Continued strength in gold, copper, and lithium offers partial mitigation.
Philippines central bank sees June inflation at 1.1% to 1.9%
The Bangko Sentral ng Pilipinas expects June’s inflation rate to remain between 1.1% and 1.9%, slightly down from 1.3% in May. Final data is due July 4 .
Insight
Inflation remaining within this lower band should support the central bank’s case for easing monetary policy further, given May’s slowdown to a multi-year low. It reflects manageable price pressures amidst a cautious growth outlook.
Danantara Seeks Up to $10 Billion Loan, Southeast Asia’s Largest
Indonesia’s sovereign wealth fund, Danantara, is preparing a multicurrency loan of up to US $10 billion with a 3–5-year tenor—potentially the largest such deal in Southeast Asia .
Insight
The move signals Indonesia’s ambition to scale its SWF quickly by securing external financing rather than relying solely on state assets. However, the lack of explicit government guarantees adds scrutiny to the perceived risk by global lenders.
Sri Lanka’s Colombo consumer price index falls 0.6% y/y in June
According to Colombo data, consumer prices fell 0.6% year-on-year in June, slightly improved from a 0.7% drop in May .
Insight
Continued deflation indicates weak domestic demand and ongoing disinflationary pressures. While this may support household purchasing power, it also highlights the challenges of reviving economic activity and avoiding stagnant growth.
ADB acting on US concerns over China, bank chief tells AFP
The Asian Development Bank (ADB) is adjusting its strategy to address U.S. concerns about lending to China, including scaling back loan volume to the world’s second-largest economy, according to ADB president in an AFP interview (finance.yahoo.com, ground.news).
Insight
ADB’s alignment with U.S. priorities reflects geopolitical shifts impacting multilateral development banks. This recalibration may constrain China’s access to concessional funding and signal a broader pivot in ADB’s lending priorities, affecting regional infrastructure investment dynamics.
