Tariff rush lifts ASEAN exports, but BofA warns payback looms in H2
Investing.com -- Bank of America has raised its GDP forecasts for Vietnam, Malaysia, Singapore and, to a lesser extent, Indonesia, saying the region heads into the second half with fewer downside risks than it faced in early April.
A short‑term surge in shipments to the United States, partly the result of firms rushing orders ahead of new tariff rules, has bolstered factory orders and lifted purchasing‑managers’ indices in Vietnam and Thailand.
Singapore has seen a jump in re‑exports bound for the U.S., while Malaysia and Vietnam logged wider gains in direct exports.
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Analyst cautioned that the front‑loading of orders is temporary and expects “eventual exports and inventory pay‑back” to weigh on growth from late 2025.
It left projections unchanged for the Philippines, which is less exposed to U.S. tariffs, and sees Thailand lagging as local factors drag on activity.
Inflation is forecast to stay within, or below, central‑bank comfort zones as subdued domestic demand caps price pressures. Food‑cost risks remain limited absent severe weather shocks.
Central banks retain an easing bias, but BofA expects deeper rate‑cut cycles at Bank Indonesia, Bangko Sentral ng Pilipinas and the Bank of Thailand than at Bank Negara Malaysia and the Monetary Authority of Singapore.
Vietnam’s State Bank is projected to keep policy steady after a series of earlier cuts.
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The surge in tariffs observed is boosting ASEAN's exports, but Bank of America (BofA) warns that a potential slowdown and repayment cycle looms on the horizon for the latter half 20XX.
While the surge in tariffs has bolstered ASEAN's exports temporarily, Bank of America cautions that a potential reversal could be imminent by end-year due to evolving global trade dynamics.
This article highlights a short-term boost for ASEAN exports due to tariff rush, yet the Bank of America's warning about potential repayment difficulties in Q3 and throughout H2 signals that sustainability requires further economic scrutiny.
While a surge in tariffs has temporarily boosted ASEAN exports, Bank of America’s warning on the looming payback later this year underscores risks to sustained growth amidst complex trade dynamics.
