Wahyu Dwi Anggoro
Under a high-risk scenario, ADB projects that aggressive US policy changes could erode global economic growth slightly over the next 4 years. Broad-based tariffs are likely to dent international trade and investment, while leading to a shift toward more costly domestic production.
At the same time, reduced immigration could tighten the US labor supply. Combined with a potentially more expansionary fiscal stance under the incoming Trump administration, tariffs and migration curbs could rekindle inflationary pressures in the US.
Despite the scale of the assumed US policy changes, particularly on tariffs, the impacts on developing Asia and the Pacific are limited under this high-risk scenario.Negative spillover effects across the region, via trade and other links, would likely be offset by diversion of trade and relocation of production from China to other economies.
Apart from uncertainty surrounding US policy changes, risks to developing Asia and the Pacific’s growth and inflation outlooks include escalations of geopolitical tensions as well as continued property market fragility in China. (Wahyu Dwi Anggoro)
