Think tank sees AsPac exports remaining sluggish

Growth in exports from Asia Pacific will continue to be sluggish in the coming months as the so-called “phase one” deal between the US and China is not expected to have material progress soon, UK-based Oxford Economics said over the weekend.

In a research brief titled “Asia Pacific export growth still in the red but stabilizing,” the macroeconomy research firm said regional merchandise exports fell four percent in October, the same rate of deceleration as the previous month, as export prices of tech goods fell.

A modest improvement in year-on-year growth can be expected in the coming months because of the ongoing recovery in Chinese import demand but the prevailing US-China trade tensions as well as weak global trade are likely to keep a lid on momentum.

“Going forward, we expect Asia’s export growth to continue facing headwinds from sluggish global growth momentum. A “phase 1” deal between the US-China and the sequential improvement underway in Chinese import demand could improve the climate in coming months,” said Oxford Economics.

“But we do not expect any tangible progress in trade talks and believe that the bulk of tariff already in place will remain. This is likely to keep the external environment challenging for Asian economies,” it said.

The so-called phase one trade deal involves the rollback of some of the tariffs imposed on Chinese goods exported to the US.

But so far, US and China have not yet agreed on the specifics such as the size of the tariffs or the schedule of the rollback.

Oxford Economics said that as of October, exports across larger economies like China, Japan, South Korea and Singapore have fallen.

The Philippines will report its October external trade figures next week.