ASEAN economies face slowdown in H2 as export boost fades

Nikkei Asia reported that ASEAN economies are bracing for an economic slowdown in the second half of the year as the boost from accelerated exports begins to fade.

In Thailand, gross domestic product grew 2.8% year-on-year in the quarter ending June, down from 3.2% growth in the previous quarter, according to official data released Monday by the National Economic and Social Development Council (NESDC).

Exports, which account for about 60% of Thailand’s GDP, rose 12.2%, largely due to shipments made in advance of new US import tariffs, the NESDC said.

The council now forecasts Thai economic growth of 1.8%–2.3% in 2025, a slight upward revision from May’s forecast of 1.3%–2.3%. However, the updated range indicates that growth in the second half will likely be weaker than in the first.

NESDC Secretary-General Danucha Pichayanan told reporters that falling foreign tourist arrivals also pose a risk. The agency expects 33 million visitors this year, below the 35 million projected by the Tourism Authority of Thailand.

“We need to accelerate tourism promotion in the second half of the year, especially in the final quarter, which is the peak travel season,” Danucha said.

Elsewhere in the region, Vietnam posted the fastest growth, with GDP expanding 7.96% year-on-year in Q2, driven by strong exports.

Indonesia, ASEAN’s largest economy, grew 5.12%, up from 4.87% in the first quarter. Growth was supported by robust exports and strong investment. Exports surged 10.67%, largely due to front-loaded shipments ahead of impending US tariffs, according to Statistics Indonesia. Key export items included palm oil, steel, electronics and vehicles.

Singapore’s economy expanded 4.4% in April–June, slightly faster than 4.1% in Q1, as producers accelerated exports during the tariff suspension period. The Ministry of Trade and Industry described the effect as a “temporary boost” for production and exports, but warned that benefits would fade in the second half amid heightened global uncertainty.

Malaysia’s GDP grew 4.4% in Q2, unchanged from Q1, supported by domestic consumption, continued manufacturing growth, and a rebound in tourism. However, Bank Negara Malaysia cut its full-year forecast to 4.0–4.8%, from 4.5–5.5%, citing trade uncertainty.

The Philippines’ economy expanded 5.5% in Q2, slightly up from 5.4% in the previous quarter.

Amid signs of slowing momentum across the region, several central banks have eased monetary policy to support household consumption. Bank Indonesia cut its policy rate by 25 basis points to 5.25%, while Bank Negara Malaysia made a similar cut to 2.75% last month. The Bank of Thailand followed last week, trimming its benchmark rate from 1.75% to 1.5%.

Gareth Leather, senior Asia economist at Capital Economics, said of Thailand’s move: “Further easing is likely over the coming months given sluggish growth, falling Chinese tourist arrivals, and the fading boost from pre-tariff export surges.”

Analysts at Kasikorn Research Center noted that ASEAN nations have reached agreement on new tariff rates of around 19–20%, but under the condition that they significantly increase duty-free imports from the United States. “This could pose a new threat for ASEAN economies, which remain fragile,” the centre warned.