Inflation in the region continues to moderate, despite a temporary spike in oil prices driven by Middle East tensions. The region’s financial markets have also shown resilience, with regional currencies generally appreciating against the US dollar amid growing market concerns over US policy uncertainty.

The economic outlook for ASEAN+3 remains clouded by significant uncertainties, with escalating US tariffs posing the most salient risk. Uneven progress in tariff negotiations and the potential expansion of tariffs to additional products could further disrupt trade activities and weigh on growth for the region.

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