Goldman Sachs(US:GS) Goldman Sachs·2025-03-24 02:16Investment Rating - The report does not explicitly provide an investment rating for the industry discussed [1]. Core Insights - The Asia-Pacific region is experiencing heightened policy uncertainty due to the second Trump administration's macro policy reorientation, including increased tariffs and potential government shutdowns [1] - The average US tariff rate is expected to exceed 10%, the highest in a century, impacting smaller manufactured goods exporters in the region [1] - Despite tariff threats, regional foreign exchange rates have remained relatively stable since the end of 2024, with the renminbi playing a crucial stabilizing role [1] Summary by Sections US Macro Policy - The second Trump administration has introduced new tariffs on China, increasing the average US tariff rate significantly [1] - Trade policy uncertainty is at an all-time high, affecting investor sentiment across the Asia-Pacific region [1] China Macro Policy - China's macro policy remains steady with GDP growth targeted at "around 5%" and CPI inflation at "around 2%" [7] - Regulatory pressures on the private sector have eased, and there is a focus on enhancing manufacturing competitiveness and boosting consumption [7] South Korea Economic Activity - South Korea faces weak economic activity and political uncertainty, with a forecasted real GDP growth of just 1.8% for the year [15] - High household debt and tight fiscal policy are contributing to prolonged domestic demand weakness [15] Indonesia Macro Policy - Indonesia's government has announced various policy initiatives aimed at growth, including a revised fiscal deficit expectation of 2.9% of GDP [16] - The central bank is expected to continue easing monetary policy to support domestic liquidity [16] India Economic Outlook - India's growth has slowed to 6.2% year-on-year, with a conservative growth forecast of 6.4% for 2025 due to policy tightness [20] - The focus has shifted to micro-level policies and state-level implementation rather than significant national reforms [20] Japan Economic Conditions - Japan is experiencing reflation with expected wage growth of 3.0% in 2025, but uncertainty remains regarding the Bank of Japan's future policy path [24] - The upcoming Upper House election may influence the timing of future rate hikes [24] Australia Economic Outlook - Australia is preparing for a national election, with limited immediate macroeconomic implications expected [27] - GDP growth has shown modest recovery, and further rate cuts by the RBA are anticipated [27]