GLOBAL ECONOMY TO SLOWDOWN IN 2H DUE TO US TARIFF IMPACT -- CGS INTERNATIONAL
KUALA LUMPUR, July 7 (Bernama) -- The global economy is expected to face a slowdown in the second half (2H) of 2025 as tariffs imposed on the United States’ (US) trading partners have impacted all economic actors, according to CGS International Securities Malaysia Sdn Bhd (CGS MY).
In a research note, CGS MY stated that while China was hit the hardest, other US allies, including Canada, Mexico and the European Union (EU), also suffered negative impacts.
“Positively, the US producers who baulked at the possibility of another trade war have frontloaded their purchases and piled up inventory in anticipation of rainy days, benefiting global trade, especially export-oriented ASEAN economies, which saw shipments and trade surpluses growing rapidly.
“That said, we think the front-loaded support is at its tail end as tariffs start to kick in and the US producers may have started looking inwards, dampening global demand,” it said.
Meanwhile, CGS MY said that the ASEAN-4 nations - Indonesia, Malaysia, Singapore and Thailand - would likely lose some key growth momentum without the support from the US frontloading.
The investment company has cut Indonesia’s 2025 gross domestic product (GDP) forecast to 4.8 per cent from 5.0 per cent, while maintaining Singapore’s GDP growth at 1.6 per cent.
“We forecast Thailand’s GDP growth of 2.0 per cent in 2025, amidst dull sentiment on consumption, ongoing political turmoil, weak international arrivals, as well as risks from Trump’s reciprocal tariffs,” it added.
Furthermore, driven by the loss of the US market, CGS MY said that China may flood its products elsewhere, pricing out ASEAN producers.
“In our view, key to watch is the US bilateral talks with ASEAN countries on the reciprocal tariffs.
“We suspect agreements will be inked in efforts to reduce US-ASEAN trade imbalance, which implies some supply chain restructuring ahead,” it said.
-- BERNAMA
