We expect another year of below-trend and below-consensus GDP growth in most of Asia in 2025, as tight fiscal policy and weak exports weigh on output. In China, a slowdown in construction will act as a further drag. Inflation is back to (or below) target across most of the region and is likely to remain low over the coming year. Against that growth and inflation backdrop, central banks will continue to ease: we expect most to cut rates by 50bps-200bps between now and the end of 2025. We are assuming that Donald Trump will apply a 60% tariff on goods from China and 10% on all other US imports. While China will be hit hard, a blanket tariff for all but China would leave other suppliers to the US on a level playing field so demand may not drop much. And the higher tariff on China could put South East Asia ahead by enabling producers to gain market share.
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