Asia Outlook: Tepid growth for many as tariff threat looms

We expect GDP growth across most of Asia to soften in 2025, with many countries likely to record below-consensus growth. The risk of escalating trade tensions remains a key concern, particularly for Vietnam, which is highly dependent on US demand. That said, some economies may benefit from trade diversion as US firms seek alternatives to China. Monetary easing across the region should support consumption and investment, but tighter fiscal policy will partly offset this boost, especially in the Philippines and Malaysia. Inflation has fallen back to target in most economies and is likely to remain subdued. With growth expected to remain weak and inflation contained, we anticipate further rate cuts across much of the region, with Taiwan and India the exceptions (both are likely to leave rates on hold until the end of the year).