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Business Times
3 days ago
- Business
- Business Times
Singapore, Thailand may see negative growth by 2026 as Asean reels from tariffs: economists
[SINGAPORE] The full impact of the escalating US tariffs on Asean's growth will likely emerge in 2026 – when the region is expected to face a sharp slowdown. Bloomberg Economics projected on Tuesday (Jun 17) that gross domestic product growth across the Asean-5 economies – Singapore, Malaysia, the Philippines, Vietnam and Indonesia – is expected to fall from 4.5 per cent in 2024 to 3 per cent in 2025. The research unit added that growth could even fade to 1.5 per cent in 2026 if the tariffs stay in place. Among the five, Thailand and Singapore are likely to be hit the hardest because of their exposure to global trade, said Bloomberg's senior economist for South-east Asia Tamara Henderson. Thailand, the exports of which account for nearly 70 per cent of GDP, faces potential tariffs as high as 36 per cent. She warned that the country's growth is likely to slip below 2 per cent in 2025, and may contract outright in 2026 if the tariffs remain. 'Over 11 per cent of Thailand's GDP comes from merchandise exports to the US, particularly in electronics and chips,' she noted. 'Auto-supply chains are also affected, and tourism recovery has faltered.' A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Although Singapore faces the minimum 10 per cent baseline tariff, it is arguably the most exposed in the region because of its export-oriented economy. About 6 per cent of its GDP depends on exports to the US, with significant trade in semiconductors and pharmaceuticals, for which the likelihood of additional duties remains unclear. This could drag Singapore's 2025 growth sharply below the strong 4.4 per cent recorded in 2024. If the tariffs remain in force, Singapore's economy could contract by around 1 per cent in 2026, Henderson projected. 'Singapore is likely to take the largest hit to growth in the near-term from the tariff shock. However, its agile and well-resourced government may allow the city-state to emerge with less scarring over the medium term,' she added. Economies such as the Philippines and Indonesia are expected to weather the tariff storm better, given that their growth is more led by domestic demand. In Indonesia, US-bound shipments account for only around 10 per cent of exports. 'Exports in Indonesia are about 25 per cent of overall GDP, compared to household spending, which makes up around 50 per cent,' said Henderson. Likewise, the Philippines' tight labour market and strong household sector are likely to support domestic spending, shielding the country from heavy tariff shocks. She noted, however, that the tariffs could hit both economies in areas beyond trade, given that weak global demand and weaker pricing power along supply chains could dampen the region's investment and hiring opportunities. Balancing acts Heavy US tariffs on South-east Asian economies mean that the region's attractiveness as an alternative 'China-plus-one' destination is slowly fading. Asean countries must therefore find new opportunities to remain resilient, said Priyanka Kishore, lead economist at the policy consultancy Asia Decoded; she was speaking at the launch of a report on the region's economic outlook by the Institute of Chartered Accountants in England and Wales on Jun 12. China's role in the changing global order will be difficult to navigate, she said, because its improvements in manufacturing could be damaging to the region's economies, even as it offers an alternative trade destination to the US. She noted that the region's labour productivity has lagged at half the pace of China's in recent years. 'China is capital-intensive and mechanised; it is producing items at a fraction of the cost of that in a factory in Indonesia. 'Regional cooperation will have to include reform in infrastructure and human capital development, such as training of skills and digitalisation,' she said. Henderson added that Asean's resilience will depend on identifying new competitive niches. 'Finding these gaps will be the challenge. Perhaps, these will be in services. Countries such as Singapore, with its many Mandarin speakers, could see an advantage in its ability to understand both the West and China,' she suggested. But China's place in the Asean story is not entirely damaging, analysts say. The Chinese government's efforts to boost its ailing economy have been widespread, and aimed at making domestic demand the main engine and anchor of its economic growth. If successful, a wealthier Chinese middle class could spark opportunities in trade and investment for certain sectors in the region. Gary Tan, portfolio manager at Allspring Global Investments, said: 'These include tourism, logistics and e-commerce; regional hubs like Singapore could see increased cross-border activity.'
Business Times
3 days ago
- Business
- Business Times
Singapore, Thailand may see negative growth by 2026 as Asean reels from tariffs: Bloomberg
[SINGAPORE] The full impact of the escalating US tariffs on Asean's growth will likely emerge in 2026 – and Bloomberg projects a sharp regional slowdown. Gross domestic product growth across the Asean-5 economies – Singapore, Malaysia, the Philippines, Vietnam and Indonesia – is expected to fall from 4.5 per cent in 2024 to 3 per cent in 2025; Bloomberg Economics projected on Tuesday (Jun 17) that growth could even wilt to 1.5 per cent in 2026 if the tariffs stay in place. Among the five, Thailand and Singapore are likely to be hit the hardest because of their exposure to global trade, said Bloomberg's senior economist for South-east Asia Tamara Henderson. Thailand, the exports of which account for nearly 70 per cent of GDP, faces potential tariffs as high as 36 per cent. She warned that the country's growth is likely to slip below 2 per cent in 2025, and may contract outright in 2026 if the tariffs remain. 'Over 11 per cent of Thailand's GDP comes from merchandise exports to the US, particularly in electronics and chips,' she noted. 'Auto-supply chains are also affected, and tourism recovery has faltered.' Although Singapore faces the minimum 10 per cent baseline tariff, it is arguably the most exposed in the region because of its export-oriented economy. About 6 per cent of its GDP depends on exports to the US, with significant trade in semiconductors and pharmaceuticals, for which the likelihood of additional duties remains unclear. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up This could drag Singapore's 2025 growth sharply below the strong 4.4 per cent recorded in 2024. If the tariffs remain in force, Singapore's economy could contract by around 1 per cent in 2026, Henderson projected. 'Singapore is likely to take the largest hit to growth in the near-term from the tariff shock. However, its agile and well-resourced government may allow the city-state to emerge with less scarring over the medium-term,' she added. Economies such as the Philippines and Indonesia are expected to weather the tariff storm better, given that their growth is more led by domestic demand. In Indonesia, US-bound shipments account for only around 10 per cent of exports. 'Exports in Indonesia are about 25 per cent of overall GDP, compared to household spending, which makes up around 50 per cent,' said Henderson. Likewise, the Philippines' tight labour market and strong household sector are likely to support domestic spending, shielding the country from heavy tariff shocks. She noted, however, that the tariffs could hit both economies in areas beyond trade, given that weak global demand and weaker pricing power along supply chains could dampen the region's investment and hiring opportunities. Balancing acts Heavy US tariffs on South-east Asian economies mean that the region's attractiveness as an alternative 'China-plus-one' destination is slowly fading. Asean countries must therefore find new opportunities to remain resilient, said Priyanka Kishore, lead economist at the policy consultancy Asia Decoded; she was speaking at the launch of a report on the region's economic outlook by the Institute of Chartered Accountants in England and Wales on Jun 12. China's role in the changing global order will be difficult to navigate, she said, because its improvements in manufacturing could be damaging to the region's economies, even as it offers an alternative trade destination to the US. She noted that the region's labour productivity has lagged at half the pace of China's in recent years. 'China is capital-intensive and mechanised; it is producing items at a fraction of the cost of that in a factory in Indonesia. 'Regional cooperation will have to include reform in infrastructure and human capital development, such as training of skills and digitalisation,' she said. Henderson added that Asean's resilience will depend on identifying new competitive niches. 'Finding these gaps will be the challenge. Perhaps these will be in services. Countries such as Singapore, with its many Mandarin speakers, could see an advantage in its ability to understand both the West and China,' she suggested. But China's place in the Asean story is not entirely damaging, analysts say. The Chinese government's efforts to boost its ailing economy have been widespread, and aimed at making domestic demand the main engine and anchor of its economic growth. If successful, a wealthier Chinese middle class could spark opportunities in trade and investment for certain sectors in the region. Gary Tan, portfolio manager at Allspring Global Investments, said: 'These include tourism, logistics and e-commerce; regional hubs like Singapore could see increased cross-border activity.'
South China Morning Post
5 days ago
- Business
- South China Morning Post
Trade worries drag down Singapore's home sales to 5-month low
Singapore 's new private home sales fell to a five-month low in May, as global tariff tensions weighed on demand in the trade-dependent city state. Developer sales dropped for a third consecutive month, with just 311 units bought last month, according to data released by the Urban Redevelopment Authority on Monday. The outlook for the Southeast Asian financial hub has dimmed, following US President Donald Trump 's push for tariffs and the city state's economy contracting in the first quarter. Developers have grown more cautious, launching no major projects for sale in May – a pause that further weighed on sales figures. People gather along the boardwalk in front of the skyline at Marina Bay in Singapore. Photo: AFP A first-quarter survey of senior real-estate executives found that nearly 90 per cent viewed a global economic slowdown as a risk. Their next biggest concerns were job losses and a weakening domestic economy. Singapore faces heightened risks of a recession due to export hits brought on by tariffs, Bloomberg Economics analyst Tamara Henderson said in a report earlier this month. Authorities have adopted a more cautious approach, offering land that could yield 4,725 private housing units in the second half of the year – a 6 per cent drop from the first half. Instead, they expanded the so-called reserve list, where land parcels are only triggered for tender if there is sufficient demand from developers.
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Business Standard
7 days ago
- Business
- Business Standard
Iran launches hundreds of ballistic missiles on Israel as conflict widens
Iran fired hundreds of ballistic missiles against Israel following an unprecedented direct attack on its nuclear facilities, ramping up a conflict between sworn enemies that threatens to engulf the Middle East and disrupt global oil supplies. Multiple waves of missiles targeting Israeli cities amount to the most forceful step yet by Tehran since Israel's overnight raids killed top Iranian generals and badly damaged key military infrastructure. Israel said it identified missiles launched from the Islamic Republic and reported explosions from interceptions and falling debris from incoming projectiles. There was dramatic video footage of at least one large explosion in Tel Aviv, and reports of explosions over Jerusalem. The extent to which Israel's air defenses were pierced remains to be seen, with US forces helping to intercept and shoot down Iranian attacks. Markets took another hit from the surge in tensions: The S&P 500 lost over 1 per cent, wiping out this week's advance. West Texas Intermediate crude futures surged more than 7 per cent, the most since March 2022. Gold and the dollar rose. When the pair targeted each other last year, there was a greater time lag and a sense that after an exchange of fire, there would be a détente. This time, Israel has indicated this is an operation that could last weeks. This poses an existential problem for Iran, and a question of whether it can match its fiery rhetoric with actions. Israel has dramatically exposed its weaknesses, decimated its proxies and taken out key leaders. Additional escalations — particularly any targeting of American military or diplomatic facilities in the region — could rally domestic political support, but could dramatically intensify the conflict. It was unclear if Tehran was entertaining last-resort options such as blocking the Strait of Hormuz, one of the world's most vital oil arteries, in a scenario that investors fear the most. Iran's Supreme Leader Ayatollah Ali Khamenei vowed to 'act forcefully' in a pre-recorded video message carried by state TV. His statement was released after Iran started its retaliation. Unlike previous responses, this one came much faster. Given Israeli Prime Minister Benjamin Netanyahu has followed through on his long-promised threat to dismantle Iran's nuclear program, Iran was feeling the pressure to find a commensurate answer. So far, Israel has chosen to keep the US out of the conflict — a decision that an analysis by Bloomberg Economics suggested was the most likely since Tehran can't afford to go to war with the world's biggest economy and mightiest military. The backdrop are indirect nuclear talks between the Islamic Republic and the US, with a sixth round of negotiations scheduled to take place on Sunday. But the damage to its standing in the region is real. The head of the Islamic Revolutionary Guard Corps, Hossein Salami, and the military's chief of staff, Mohammad Bagheri, were both killed in Israeli strikes. At least two other senior IRGC members also died and several nuclear facilities were targeted. Iran informed the International Atomic Energy Agency that Israel struck the nuclear sites at Fordow and Isfahan as part of its wave of attacks in the last 24 hours, Director General Rafael Mariano Grossi told the UN Security Council on Friday. Grossi said the IAEA doesn't have information beyond indications that military activity took place around those facilities. But the move is important — if the facility at Isfahan is disabled, it would seriously crimp Iran's ability to enrich uranium in large volumes. Israel 'should not think that it is over. We won't allow them to escape unscathed from this great crime they have committed,' Khamenei said. But the Iranian supreme leader's terse statement shows Iran is probably not prepared to make any concessions. Iran's Foreign Minister Abbas Araghchi said Friday's attacks have derailed diplomacy. Meanwhile, with the Group of Seven leaders gathering in the Canadian Rockies, the attention will focus on how US President Donald Trump will react — or not. Going into the summit, there was a common desire to keep fraught geopolitical issues off the table but that will be difficult to do given the knock-on effects of a spike in oil prices on inflation and energy exports. Given the region is such a big crossroads for shipping of not just oil but consumer goods, any all-out war will further strain a global trading system disrupted by the trade wars. For his part, Trump gave brief telephone interviews to a smattering of journalists, particularly those from cable news networks, but otherwise didn't take to the cameras to make public remarks. The White House said Trump was not expected to emerge Friday night, though he could always turn to social media or additional interviews with the media. On Saturday, Trump's 79th birthday, he's scheduled to host a military parade ostensibly to celebrate the US Army's 250th year. He took to social media to warn Iran to make a deal 'before it is too late.' Come Saturday, the extent of the damage on both sides will come into focus. Israel said more than 200 aircraft participated in the operation that targeted around 100 locations across Iran. At least 95 people were wounded and several residential buildings in Tehran's suburbs were hit, according to Iranian media. Iran's ambassador to the United Nations said 78 people were killed in the attacks. One woman was killed in the Tel Aviv area, a police spokesman in Israel said. Netanyahu and Trump spoke by phone Friday to discuss the conflict, according to a White House official. The US has said it did not play a role in Israel's initial volley, and warned Iran against retaliation against American service members. The US role assisting Israel's aerial defense is customary, but what it does next will be critical.
NBC News
13-06-2025
- Business
- NBC News
How Israel's Iran strikes might open 'Pandora's box' for the region — and the U.S.
If Iran did decide to retaliate against American interests, that would likely mean some form of 'major creep' into Iraq or the Gulf, Geranmayeh, at the European Council on Foreign Relations, told NBC News. And that's less likely, according to her and other analysts, because of the rapprochement between Tehran and previous foes such as Saudi Arabia and Qatar in recent years. Despite Israel's overwhelming military superiority, Netanyahu could be in a tricky spot, as he does not have the capabilities to eliminate Iran's nuclear facilities alone, according to Dina Esfandiary, the Middle East geoeconomics lead for Bloomberg Economics, Bloomberg's internal research division. With its U.S.-funded armed forces, Israel 'can do considerable damage' she said. 'But it can't be successful' in its stated objective of 'crippling Iran's nuclear program' without 'the U.S. coming on board,' Esfandiary said. Principally, it doesn't have the means to target the deeply buried underground facilities of Iran's nuclear program, experts say. In short, as Rouzbeh Parsi, director of the Middle East program at the Swedish Institute of International Affairs, put it on X: 'Israel has always been capable of starting this war. But it has been equally clear that it cannot finish it on its own.'
