A long-awaited US interest-rate cut would offer welcome relief to Asian economies still grappling with the Trump administration’s tariff program, according to Albert Park, chief economist at the Asian Development Bank.
The Federal Reserve is widely expected to ease monetary policy for the first time in 2025 after data showed US jobs growth cooled notably in August and unemployment climbed to the highest since 2021. If delivered, a rate cut would be “beneficial for financial conditions in the region,” Park said Monday in an interview in Sydney.
“It gives a little bit of space on loan repayment,” he said, adding Asia’s growth outlook for “next year is a little bit less certain as we start to see the lagged effects of the impacts of tariffs.”
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Park pointed to Laos and the Maldives as having a fragile fiscal outlook with “pretty high” debt levels and a rising cost of servicing loans that are largely denominated in US dollars. Other Asian economies, more generally, are “pragmatically managed” with a “sound” macroeconomic outlook, he added.
“Those are the two places that we’re following most closely,” Park said, while noting that the region has so far proved “surprisingly resilient” to trade shocks.
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The ADB will release updated economic growth forecasts for Asia later this month with the outlook expected to be broadly similar to July’s revisions, Park said. The lender in July trimmed its 2025 growth projection for East Asia to 4.3 percent from 4.4 percent — still robust, but underscoring how trade tensions and tighter global conditions are weighing on momentum.
US import levies on Asia are at historic highs with an average of 27.8 percent, according to ADB calculations, compared with the mean US tariff rate of 18.6 percent.
“Given that a lot of the countries got about the same rate you don’t see this big pressure to shift manufacturing,” Park said. “So that probably preserves the stability of export markets, but still, higher prices of goods in the end will lower demand.”
