The U.S. economy maintained its trajectory of slightly above-trend growth in the second quarter of 2018. In contrast, economic growth slowed further in the Eurozone while the U.K. saw a slight rebound. Going into the third quarter, economic sentiment appears to have improved. In the region, China’s growth remains robust in the first half of 2018, notwithstanding the external uncertainties from trade tensions and ongoing financial deleveraging domestically. Japan’s growth rebound strongly in the second quarter, supported by a strong rebound in private consumption and business spending. Going into July, growth momentum appears to have eased. In other regional economies, monthly manufacturing Purchasing Managers’ Index (PMI) readings suggest slight softening of economic activities going into July, potentially signalling a moderate growth outlook ahead. The uncertainties over global trade outlook and the renewed USD strength will continue to pose strong headwinds, with downward pressure on commodity and asset prices and capital flows.

The Monthly Update of the ASEAN+3 Regional Economic Outlook (AREO) provides regular, short updates on regional economic developments, to supplement the annual AREO published in May each year. The Updates are published eight times a year, with the April and May editions incorporated into the annual AREO published in May, and the November and December editions into next year’s January Update (Special Edition).