Weekly Economic Review

Macroeconomic

Weekly Economic Review

25 November 2025

By Macroeconomic Team

U.S. employment remain weak. Japan-China tensions raise economic uncertainty. China weighed down by weak labor market and property slump

US

Recent volatility in U.S. employment figures has clouded the monetary-policy outlook. Nonfarm payrolls rose by 119,000 in September, but August’s number was sharply revised down from a 22,000 gain to a 4,000 decline. The unemployment rate increased to 4.4%, the highest since October 2021. In November, consumer confidence index fell to a 6-month low of 51. The flash manufacturing PMI also slowed to a 4-month low though the flash services PMI saw its strongest expansion since February.

A weakening labor market and manufacturing activity, along with weak sentiment, point to a slowdown in the U.S. economy. Recently, the government’s announcement of tariff exemptions on more than 2,000 food imports—combined with low energy prices—should help ease some inflationary pressure caused by tariff increases. However, the cancellation of October’s employment report and the possible delay of November’s data may leave the Fed without enough information to support a rate cut at its December 9-10 meeting.”

Weekly Economic Review

Japan

Despite new stimulus measures, rising tensions with China raise uncertainty to Japan’s economic outlook. Japan’s 3Q25 GDP contracted for the first time in 6 quarters, by –1.8% YoY and –0.4% QoQ, with exports down –1.2% QoQ. The manufacturing PMI remained in contraction for a fifth straight month at 48.8 in November, while the services PMI continued to expand at 53.1. Prime Minister Sanae Takaichi has approved a large-scale fiscal stimulus package totaling JPY 21.3 trillion to counter the economic slowdown and mitigate the impact of inflation.

Japan’s economy remains fragile, as consumption is pressured by a high cost of living and exports are weighed down by U.S. tariff hikes. Meanwhile, escalating Japan-China tensions add further risks: China has urged its citizens to refrain from traveling to Japan, halted purchases of Japanese seafood, and paused approvals of new Japanese films—moves that could hurt Japan’s tourism and exports. Nevertheless, new stimulus package—its largest since the COVID-19 period—should help cushion some of the negative impact. Krungsri Research expects the BOJ to raise interest rates by 25bps to 0.75% by 1Q26, in response to yen weakness and inflation concern.

Weekly Economic Review

China

Weakness in the labor market and the real estate sector continues to undermine China’s economic growth. In October, the youth unemployment rate (ages 16–24, excl. students) remained high at 17.3%. Meanwhile, new home sales by top 100 developers saw their sharpest contraction in a year at -41.9% YoY. Average prices for new and second-hand homes across 70 cities have been shrinking for nearly four years in October at -2.6% and -5.4%, respectively. Recently, the government has been considering additional measures to accelerate the resolution of the real estate crisis, such as mortgage subsidies and increased tax rebates for homebuyers, coupled with lower property transaction costs.

Weaker exports may drive China to depend more on domestic consumption. If retail sales growth rises from 3.5% YoY in 2024 to 5.5%, the gains could offset 26% of exports to the U.S. However, stimulating demand faces significant challenges and limitations from high youth unemployment, low confidence in future employment (45% below pre-COVID levels), and wealth losses due to the property crisis. Currently, the property sector shows no signs of recovery despite continuing rescue measures, while long-term demand for new homes is expected to cool due to demographic contraction.

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Thailand’s Medium-Term Fiscal Framework signals efforts to reduce fiscal risks amid credit-rating pressure

The government aims to tighten fiscal discipline, targeting a fiscal deficit of below 3% of GDP by 2029. The Cabinet has approved the Medium-Term Fiscal Framework (MTFF) for 2027–2030, which sets a target to reduce the fiscal deficit to no more than 3% of GDP by 2029, down from a deficit of 4.4% in 2026. The public debt ceiling is maintained at 70% of GDP. The framework also introduces stricter fiscal rules, including: (i) limiting the central budget at no more than 3% of total budget expenditure, (ii) allocating at least 4% of the budget for debt repayment, and (iii) capping multi-year commitment budget at no more than 5% of the total budget. In addition, the government is accelerating its consideration of the FY2027 Budget Bill, setting expenditure at THB 3.788 trn (+0.2% YoY). The budget remains in deficit at 3.9% of GDP.

The adoption of stricter fiscal rules reflects the government’s effort to strike a balance between supporting economic growth and maintaining long-term fiscal sustainability—an important move at a time when two major credit rating agencies revised Thailand’s outlook to ‘Negative’ (in April and September). The target to reduce the fiscal deficit to below 3% of GDP by 2029, faster than the previous plan, along with tighter limits on the central budget, debt-repayment allocations, and multi-year commitment budget, enhances transparency and credibility in the budget process. These measures also demonstrate the government’s determination to contain public debt within the 70% of GDP ceiling, a threshold closely watched by financial markets. Moreover, efforts to reform the government’s revenue structure while curbing non-essential expenditures should strengthen investor confidence and help lower the state’s borrowing costs over the medium term. If implemented effectively, the new fiscal framework would support fiscal stability and improve Thailand’s credit profile going forward. Notably, in mid-November, S&P reaffirmed Thailand’s BBB+ rating with a Stable outlook.

Weekly Economic Review

Announced :25 November 2025

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Weekly Economic Review

Macroeconomic