Developing Asia and Pacific's growth to ease to 4.9% in 2025: ADB

The regional growth is expected to decline further to 4.7 per cent next year. The inflation is projected to moderate to 2.3 per cent this year and 2.2 per cent next year as global food and energy prices continue to decline, as per the Asian Development Outlook (ADO) April 2025.

While economies in the region are resilient, faster and larger-than-expected changes in US trade and economic policies pose risks to the outlook. Along with higher US tariffs, increased policy uncertainty and retaliatory measures could slow trade, investment, and growth, ADB said in a press release.

“Economies in developing Asia and the Pacific are supported by strong fundamentals, which are underpinning their resilience in this challenging global environment,” said Albert Park, chief economist at ADB. “Rising tariffs, uncertainties about US policy, and the possibility of escalating geopolitical tensions are significant challenges to the outlook. Asian economies should retain their commitment to open trade and investment, which have supported the region’s growth and resilience.”

Further deterioration of China’s property market, the region’s largest economy, could also drag on growth. ADB projects a 4.7 per cent expansion for China this year, and 4.3 per cent next year, compared with 5.0 per cent last year.

Stronger growth in South Asia and Southeast Asia, driven by domestic demand, and a continued recovery in tourism elsewhere in the region will partly offset the slowdown in China. India—South Asia’s largest economy—is projected to grow by 6.7 per cent this year and 6.8 per cent next year. Economies in Southeast Asia are forecast to grow by 4.7 per cent this year and next year, added the report.

Weak external demand is expected to weigh on economic activity in Caucasus and Central Asia, with growth projected to slow from 5.7 per cent last year to 5.4 per cent this year and 5.0 per cent next year. For the Pacific, tourism will continue to support growth but at a slower pace, which is forecast at 3.9 per cent this year and 3.6 per cent next year, compared to 4.2 per cent last year.

The growth forecasts were finalised prior to the announcement of new tariffs by the US administration, so the baseline projections only reflect tariffs that were in place previously, the release added.

ALCHEMPro News Desk (SG)