India and ASEAN economies would benefit from a Trump presidency, Moody’s Ratings said on November 8.
“In the Asia-Pacific region, trade and investment flows might be further diverted away from China as the US tightens investments in strategic sectors, which would negatively affect China's economy and consequently dampen regional growth,” the ratings agency noted.
Moody's, however, opined that this is likely to benefit India and ASEAN economies.
“Continued US-China polarization also risks exacerbating geopolitical divisions in the region, increasing risks of disruption to the global supply of semiconductors,” it further said.
Donald Trump trounced Kamala Harris on November 6 in the US Presidential election, winning the popular vote and the electoral college.
Moody’s noted that the US’ fiscal health is likely to deteriorate with the country running large deficits.
“In a second Trump administration we expect large fiscal deficits, protectionist trade actions, climate-measure rollbacks, a stricter stance on immigration, and easing regulations. The credit effects will depend on the policy specifics, which will be influenced by the composition of Congress,” Moody’s said.
The ratings agency also cited risks to global growth with the proposed tariff plan.
The former president, on the campaign trail, has proposed imposing 10-20 percent tariffs across the board.
“Trump's proposed trade policies, including broad-based tariffs on US imports, are likely to be more disruptive, increasing risks to global growth and potentially prompting retaliatory measures from trade partners. Protectionist measures could disrupt global supply chains and negatively affect sectors that rely on imported materials and goods, such as manufacturing, technology, and retail,” Moody’s pointed out in the report.
Global growth is likely to stay muted in 2025, IMF had said in its report released in October.
The Indian economy is expected to grow 7 percent in FY25, further easing to 6.5 percent the following fiscal.
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