KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
The International Monetary Fund (IMF) raised its growth forecast for the Asia-Pacific region but cautioned that escalating U.S.–China trade tensions could derail momentum in one of the world’s most interconnected regions.
Asia’s Resilient Growth Amid Tariff Headwinds
According to Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, Asia’s economy is expected to grow 4.5% in 2025, slightly down from 4.6% in 2024 but 0.6 percentage point higher than the IMF’s April estimate. Growth is projected to moderate to 4.1% in 2026.
“The region is once again set to contribute about 60% of global growth, both this year and in 2026,” Srinivasan said.
Despite facing U.S. tariffs, Asia’s economic activity has remained stronger than expected, driven by front-loaded exports, intra-regional trade, and a technology boom led by artificial intelligence (AI) demand in South Korea and Japan.
Equity market rallies, lower long-term borrowing costs, and a weaker U.S. dollar have also supported growth across the region.
Rising Risks From U.S.–China Tensions
However, the IMF warned that renewed trade frictions could deliver a sharper blow to Asia than other regions.
“When risks to the world materialise, Asia will lose a lot more,” Srinivasan said, noting the region’s heavy integration into global supply chains.
The latest flare-up comes after China expanded export controls on rare earth minerals, prompting U.S. President Donald Trump to threaten an additional 100% tariff on Chinese goods effective November 1.
The IMF noted that the full impact of these measures is not yet reflected in its forecasts.
Policy Recommendations: Shift Toward Domestic Demand
Srinivasan urged policymakers to pivot toward domestic demand and strengthen regional integration to cushion against external shocks.
According to IMF estimates, greater regional cooperation could raise Asia’s GDP by up to 1.4% over the medium term.
He also warned that financial tightening amid heightened uncertainty could strain debt-laden economies and curb investment.
“Concerted reforms to boost trade, investment, and productivity will be key to sustaining durable growth,” Srinivasan added.
Summary
Asia 2025 growth forecast: 4.5% (up from April’s 3.9%)
Main driver: AI-led tech exports and intra-Asia trade
Key risks: U.S.–China tariffs, debt burden, global uncertainty
Outlook for 2026: Growth slowing to 4.1%
IMF call: Focus on domestic demand and regional integration to sustain resilience
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