South Asia in July 2026: the most important developments in economy
The economy of South Asia in July 2026 was shaped mostly by developments in Southeast Asian economies, above all new US trade measures. On July 24 the United States imposed a 12.5% tariff on Singapore, citing an alleged violation of a forced labor ban, and announced tariffs of up to 12.5% on 60 trading partners, including Thailand and Indonesia. Singapore and Vietnam rejected the measure. On July 28 the US was reported to be investigating Chinese factories in Vietnam. Thailand sought 78 further exemptions for key export goods, and Indonesia sought one for palm oil.
Indonesia reported its first budget deficit in six years on July 1, at $1.61 billion. On July 9 it received its first Russian oil shipment, under a supply deal of 150 million barrels. S&P Global Ratings affirmed its investment-grade rating with a stable outlook on July 13. On July 21 Indonesia passed a law creating international financial hubs. Bank Indonesia held its key rate on July 22, and on July 27 governor Warjiyo unexpectedly resigned.
Elsewhere in Southeast Asia, the World Bank moved Vietnam to the upper-middle-income category on July 3, and banks raised Vietnam's 2026 growth forecasts to as much as 9.5%. Thailand raised its 2026 growth forecast after June exports beat expectations and ended a proposed Land Bridge project over low returns and fiscal risks. Singapore's non-oil domestic exports rose 20.7% in June, and its central bank tightened policy for a second time. Malaysia's June trade grew 44.7% to RM340.9 billion, its 74th straight monthly surplus.
Energy security was a theme amid disruption around Hormuz and in the Middle East. Malaysia considered a national oil reserve, and Thailand planned to buy oil outside the Middle East. In South Asia proper, Bangladesh planned a new floating LNG storage and regasification unit, considered its first sovereign bond, and faced questions over its $12.65 billion nuclear project. India opened its market to fresh Vietnamese durian on July 30.
by WorldBrief & Maksim Micheliov | AI-generated summary
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