The South Asian Macro Watch – July 2025
Despite most South Asian economies faring quite well domestically and some economies in distress showing signs of recovery, the external tariff shocks have continued to be of some concern. As a result, in South Asia, the month of July has mainly been about securing trade deals with the US before the August 1st deadline, while also balancing their domestic economies.
With 20% deals, Sri Lanka and Bangladesh remain reasonably competitive both within the region and against key Southeast Asian rivals. Pakistan, however, has secured the most advantageous terms among South Asian countries, at 19%. What remains a concern for the region is that India has not been able to secure a better deal so far, even though there have been multiple occasions where India was hopeful of doing so.
Despite all this, most economies are seeing a recovery in their current account balances. This improvement has been mainly supported by an increase in worker remittance flows. Such an improvement in remittances could counter some losses the countries could potentially face when US tariffs come into effect. However, the risk of geopolitical tensions in the Middle East rising could pose some threat to these worker remittances, as the Middle Eastern region is one of the main sources of remittances to these countries.
The full report covers further details, including:
1. Top 3 things you should know about the regional countries.
2. Summary of key economic indicators for the month.
3. Key news articles in detail.
Clients with access to Frontier Athena can view the full report at athena.frontiergroup.info. For limited-time access, please contact us at research@frontiergroup.info.