The Asia-Pacific region faces an export growth slowdown in the second half of 2025, according to Oxford Economics.
It said that in seasonally adjusted US dollar terms, Asian goods exports fell in May from April, reflecting a reversal of April’s exceptionally high trade flows.
Excluding mainland China and Japan, real exports remain elevated compared to March. “This reinforces our expectation of a decline in the region’s real exports in seasonally adjusted q/q terms going forward,” it said.
“This is despite our assumption that tariffs aren’t raised after the 90-day delay ends. Limited US inventory suggests frontloading orders by the US in first half will almost certainly mean lower exports in H2. Increased trade barriers and heightened uncertainty are further drags on Asia’s exports,” it said.
“We estimate that Asian exports fell by 1.7 percent m/m in seasonally adjusted USD terms in May, following April’s 2.1 percent expansion. May’s weakness was broad-based – most economies either experienced outright declines or slower pace of growth,” it said.
Oxford Economic said this partly reflects a reversal of April’s exceptionally high trade flows, an initial response to the 90-day delay in higher ‘liberation day’ level tariffs by the US.
Despite May’s contraction, real exports from all economies except Japan and China remain higher than March’s level, suggesting some frontloading of orders by US importers were still taking place.
It said signs still point to further rerouting of trade flows between mainland China and the US. The impact of US tariffs is also evident by product type. Volume data indicate ongoing depressed shipments from sectors facing higher tariffs such as autos and some metals.
“This trend is likely to persist until further clarity emerges, possibly closer to the end of the 90-day delay. For now, companies in the US will probably continue frontloading orders,” it said.
“Further ahead, Asian exports growth is likely to moderate due to US inventory constraints and uncertainty,” it said.
Meanwhile, Fitch Ratings said the recent de-escalation in US-China trade tensions has it to make broad-based upward revisions to its global growth forecasts compared to the previous Global Economic Outlook (GEO) published in mid-April.
But the world economy still faces a sharp slowdown induced by the most severe trade war since the 1930s, said Fitch in its June 2025 GEO.
Fitch now forecasts world GDP growth at 2.2 percent in 2025, an upward revision of 0.3 percentage point since the April GEO.
“We have also raised our forecasts for growth in 2026 to 2.2 percent from 2.0 percent. These rates are well below the 2.9 percent recorded in 2024 and the longer-term average of 2.7 percent,” it said.
