Asia Pacific economies to see 0.2-0.4 percentage points fall in growth if US levies reciprocal tariffs: S&P Global
The credit rating agency, S&P Global Ratings has said that if the US implements the reciprocal tariffs announced on April 2, major Asia Pacific economies like India, China, and Japan, will see growth fall by 0.2-0.4 percentage points over the next two years. It noted that the threat and imposition of tariffs by the US will slow global trade and confidence. The region's dependency on exports with China and the US will have an outsized hit on manufacturers and small economies.
For India, S&P had in March projected a 6.5 per cent and 6.8 per cent growth for 2025 and 2026, respectively. If the reciprocal tariff as announced by US President Donald Trump is implemented, S&P estimates the growth to fall to 6.3 per cent and 6.5 per cent, respectively.
The rating agency said that credit conditions in Asia Pacific will remain firmly on the downside as the trade tussle between China and US marks a significant escalation in ties between the two countries, and is hitting growth and confidence in Asia-Pacific. Besides, S&P said business confidence is set to deteriorate further amid halts in new investments and worsening household sentiment. Furthermore, equity and debt markets are likely to stay volatile.
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