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UBS Foresees Tariffs to Slow CN GDP Growth by 1.5ppts; PBOC May Cut Rates & RRR in Apr-May
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UBS Investment Bank’s research department released a report estimating, based on a global tariff model, that the new tariffs announced by the U.S. government could dent global economic growth by 50-100bps. Asia, facing higher tariff rates and greater exposure to U.S. exports, may experience a more enormous repercussion. Even not factoring in financial market volatility or sentiment fluctuations, Thailand and Singapore could see the largest economic growth drag at 100-120bps, followed by Malaysia at 60-80bps, and then Indonesia and the Philippines at 30bps. For China, the weighted average ad valorem tariff rate on goods imported from China to the U.S. could reach approximately 63%, potentially reducing China’s export growth this year by 5ppts and slowing its economic growth down by about 1.5ppts. UBS forecast the Chinese government to enforce targeted countermeasures, while China may need to considerably ramp up policy support over the next two quarters. The bank anticipated that this year’s broad fiscal expansion could require an additional 1-1.5ppts on top of currently announced measures. Meanwhile, the People’s Bank of China (PBOC) may initiate cuts in interest rate and reserve requirement ratio (RRR) in April or May, with policy rates expected to be lowered by at least 30-40bps within the year. AAStocks Financial News |
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