UN Report: climate shocks could cause 6pc economic loss in Asia-Pacific
A new United Nations report warns that climate shocks could lead to annual economic losses (AAL) of at least 6 percent in one-third of countries in the Asia-Pacific region, underscoring the region’s significant vulnerability to climate change.
The report, titled Economic and Social Survey of Asia and the Pacific 2025: Understanding the Macroeconomic Implications of Climate Change, published by the UN Economic and Social Commission for Asia and the Pacific (ESCAP) on Tuesday, highlights how many developing economies in the region are struggling to manage the macroeconomic repercussions of climate change and the transition to a green economy.
While the Asia-Pacific region contributed 60 percent of global economic growth in 2024, many of its countries are poorly prepared for climate shocks, according to the report.
Bangladesh’s GDP projected to grow by 3.9pc
Bangladesh’s gross domestic product (GDP) is projected to grow by 3.9 percent in fiscal year (FY) 2025, before increasing to 5.1 percent in FY2026.
The prediction was made by the Asian Development Bank’s (ADB) in their latest report, the Asian Development Outlook (ADO) April 2025, released.
Despite growth in Bangladesh’s exports in the garments sector, the slower growth forecast reflects weaker domestic demand amid political transition, risks of natural disasters, industrial unrest, and high inflation, reads the report.
Bangladesh’s economic growth was 4.2 percent in FY2024.
“Despite external and domestic headwinds, Bangladesh’s economy remains resilient, which can be fortified by implementing crucial structural reforms,” said ADB Country Director for Bangladesh Hoe Yun Jeong.
“Bangladesh should diversify its economy beyond the readymade garments sector by fostering private sector development. Enhancing resilient infrastructure, improving energy security, strengthening financial sector governance, and attracting foreign investment are crucial to accelerating growth, creating jobs, and boosting competitiveness.”
US-China trade war and the world economy
A full-scale trade war with China and the US is in prospect after President Donald Trump threatened to impose tariffs of more than 100 percent on Chinese goods imports from Wednesday 9 April.
China has said it will “fight to the end” rather than capitulate to what it sees as US coercion, and has already raised its own trade barriers against the US in response.
Sources recorded that the trade in goods between the two economic powers added up to around $585bn (£429bn) last year.
Though the US imported far more from China ($440bn) than China imported from America ($145bn).
That left the US running a trade deficit with China – the difference between what it imports and exports – of $295bn in 2024. That’s a considerable trade deficit, equivalent to around 1 percent of the US economy.
But it’s less than the $1tn figure that Trump has repeatedly claimed this week.
Trump already imposed significant tariffs on China in his first term as president. Those tariffs were kept in place and added to by his successor Joe Biden.
Together those trade barriers helped to bring the goods the US imported from China down from a 21 percent share of America’s total imports in 2016 to 13 percent last year.
So the US reliance on China for trade has diminished over the past decade. Yet analysts point out that some Chinese goods exports to the US have been re-routed through south-east Asian countries.
US tariffs to hit India’s gdp growth
India’s economic growth could slow by 20-40 basis points in the ongoing financial year due to the latest US tariffs, which would prompt deeper interest rate cuts by the central bank, analysts said.
US President Donald Trump on Wednesday slapped a 26 percent reciprocal tariff on India, threatening the Reserve Bank of India’s (RBI) estimate of 6.7 percent economic growth in 2025-26 and the government’s economic survey forecast of 6.3 to 6.8 percent.
After the tariffs, Goldman Sachs lowered its growth estimate to 6.1 percent from 6.3 percent. Citi forecast a 40 bps drag on growth directly and indirectly, while Mumbai-based QuantEco Research estimated a 30 bps hit.
Moreover, with inflation expected to average 4.2 percent this financial year, close to the RBI’s target, the central bank cut interest rates for the first time in five years in February. It is expected to follow that with another 25 bps cut to 6.00 percent at the conclusion of its April 7-9 meeting, per a Reuters poll.
However, while the poll showed that economists had expected just one more cut after that — to a policy repo rate of 5.75 percent in August — before a prolonged pause, the US tariffs have prompted a rethink to those estimates.
Goldman, Citi and QuantEco Research had also predicted just one to two more cuts this year, but now expect 75 bps of cuts this financial year, taking the policy rate to 5.5 percent, which would be the lowest since August 2022.
Indonesia’s sinking rupiah is a flashing alarm for its $1.4tn economy?
Indonesia’s rupiah is trading at record lows against the US dollar, stirring memories of the 1997-98 Asian financial crisis.
While the rupiah has been battered by the market uncertainty stemming from US President Donald Trump’s sweeping tariffs, the currency’s slide began weeks before Wednesday’s “Liberation Day” announcement.
Since the inauguration of Indonesian President Prabowo Subianto in October, the rupiah has slid about 8 percent against the dollar amid concerns about the former general’s stewardship of Southeast Asia’s biggest economy and most populous nation.
The rupiah’s plunge mirrors the collapse of the currency in 1998, which led to a financial crisis that helped bring about the end of three decades of authoritarian rule by President Soeharto.
Japan, US may discuss FX in trade talks: Minister
Japanese Finance Minister Katsunobu Kato said on Wednesday trade negotiations with the United States could include discussions on foreign exchange rates.
“There has been various communication, including on exchange rates, from the U.S. side, so currency moves could be among themes up for discussion. But specifics have yet to be set,” Kato told parliament.
Kato also said any discussions on exchange rates would be held between the finance chiefs of the two countries.
While not confirmed, Kato is expected to visit Washington later this month when G20 finance leaders gather on the sidelines of the International Monetary Fund spring meetings. The visit opens up the chance for Kato to hold his first face-to-face meeting with U.S. Treasury Secretary Scott Bessent.
Given President Donald Trump’s focus on addressing the huge U.S. trade deficit, some analysts say Japan may face pressure from Washington to help reverse the yen’s downtrend, which gives its exports a competitive advantage.
“The chance of an introduction of steps to guide the yen higher is not small,” as Trump may favour steering the dollar lower to revitalise U.S. manufacturers, analysts at Mizuho Securities wrote in a research note.
“The dollar-weakening, yen-strengthening measures will focus on yen-buying currency intervention by Japanese authorities and continued interest rate hikes by the Bank of Japan,” they said.
The yen has actually firmed more than 7 percent against the softening dollar so far this year, after sliding around 10 percent in 2024.
Malaysia Cbank tells U.S. tariffs will have impact but economy is diversified
The 24 percent tariff rate imposed by the United States on Malaysian exports could affect growth although policies already in place will help to mitigate the impact, Malaysia’s central bank governor told Bloomberg Television on Wednesday.
Malaysian exports could be impacted by the tariffs, but the economy is diversified with the service sector accounting for 60 percent of GDP, Bank Negara governor Abdul Rasheed Ghaffour said in an interview.
Malaysia’s economy grew 5.1 percent in 2024 driven by strong domestic demand, record approved investments, and robust exports. The government has forecast growth of 4.5 percent to 5.5 percent this year, but is reviewing that in light of the U.S. tariffs.
Abdul Rasheed said the central bank was not in a rush to change its own forecast as the situation was fluid. He said it was important for the government to commit to structural reforms to strengthen the economy and provide support for the ringgit. The Malaysian ringgit fell to its lowest level against the dollar in two months on Wednesday, with emerging market currencies under pressure since the tariffs announcement.
Abdul Rasheed said the central bank expected continued ringgit volatility, and was ready to curb any excessive fluctuations. “Any currency intervention is done judiciously to ensure an orderly market,” he said. Bank Negara Malaysia has held its key interest rate unchanged at 3.00 percent since May 2023.
As Mongolia approves new line, China’s rail ambitions receive another boost
Mongolia’s parliament has ratified a deal with China to jointly construct a new cross-border rail connection between the two countries, as it looks to forge closer ties with its southern neighbour amid US President Donald Trump’s tariff war.
Construction of the 19.5-kilometre (12.1-mile) railway – which will allow Mongolia to ramp up its coal exports to China – had been held up for over a decade, but the project has gained fresh momentum in recent months.
Gantumur Luvsannyam, Mongolia’s first deputy prime minister, told the Post in an interview earlier this year that the intergovernmental agreement with China was “one of the top items in the agenda”.
“Construction work will start this year and it’ll be completed in 2027,” he said, adding that coal terminals on both sides of the border would also be completed by then.
The move is the latest in a series of steps forward for China’s attempts to build a pan-regional rail network to boost ties with its neighbours.
The country is also working on a 523km railway extending to Kyrgyzstan and Uzbekistan in the west, as well as high-speed links with Vietnam and Thailand in the south.
Nepal’s business sector calls for political unrest
Business owners across Nepal say political stability has become more valuable than any currency. With 12 prime ministers since 2008, constant policy shifts have left businesses struggling to plan for the long term. From hotels in Thamel to tech startups in Lalitpur, the private sector wants consistent decision-making—regardless of who leads the government.
Nepal became a federal democratic republic in 2008. Since then, the country has seen rapid changes in leadership. In just 17 years, 12 prime ministers have taken office. Each new government introduces different policies, only to be reversed by the next one.
This back-and-forth has made it hard for businesses to invest or expand. A hotel owner in Thamel said, “We’re not concerned about the political system. What we need is stability and regimes that take consistent decisions.”
Tax rules, trade policies, and investment norms often change overnight. Entrepreneurs say this makes it hard to make long-term plans. Many now describe running a business as a gamble, not a strategy.
Sri Lanka is rewriting its economic narrative?
Two weeks after the International Monetary Fund (IMF) completed its third review of Sri Lanka’s Extended Fund Facility, unlocking millions in critical funding, President Anura Kumara Dissanayake’s cabinet approved the National Anti-Corruption Action Plan (NACAP) 2025-2029. This move, coupled with a series of bold governance reforms, signals a paradigm shift in Sri Lanka’s approach to international market engagement and perception — one that roots the nation’s economic recovery in sweeping transparency and accountability reforms.
Since assuming office in September 2024, Dissanayake’s administration has prioritized systemic reforms over piecemeal measures, aiming to address the structural weaknesses that precipitated the country’s 2022 economic collapse. This crisis, marked by severe fuel shortages, inflation, and a foreign exchange crisis, led to a default on international debt. The current efforts, ranging from public sector restructuring to digital transformation, are not merely about meeting IMF conditions; they are about positioning Sri Lanka as a credible and attractive destination for foreign investment.