MANILA: The Asian Development Bank (ADB) projected growth in Asia Pacific to moderate to 4.9% in 2025 and 4.7% in 2026, citing rising trade barriers and a slowdown in China’s property sector. The forecasts, finalized before new U.S. tariffs were announced on April 2, highlight the region’s resilience despite global headwinds.
In its Asian Development Outlook April 2025 report, the Manila-based bank noted that higher growth in South Asia, driven by robust domestic demand, would partially offset weaker performance in China. Inflation in the region is expected to ease to 2.3% in 2025 and 2.2% in 2026 as commodity prices decline, allowing central banks to loosen monetary policy.
Key Findings:
- China’s slowdown: Growth is forecast at 4.7% in 2025, down from 5.0% in 2024, due to property sector struggles and U.S. tariffs.
- South Asia’s resilience: India leads with 6.7% growth in 2025, supported by domestic demand.
- Trade tensions: New U.S. tariffs announced in April could further dampen exports, particularly for technology-driven economies like Vietnam and Taiwan.
- Inflation: Declining globally but remains elevated in the Pacific and Central Asia due to currency depreciation and public spending.
ADB Chief Economist Albert F. Park warned of downside risks, including escalating geopolitical tensions and a sharper-than-expected downturn in China’s property market. “The region faces significant trade uncertainty, but solid domestic demand and electronics exports provide a buffer,” he said.
Table 1: GDP Growth Forecasts (%)
| Region/Country | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|
| Developing Asia | 5.5 | 5.0 | 4.9 | 4.7 |
| China | 5.4 | 5.0 | 4.7 | 4.3 |
| India | 9.2 | 6.4 | 6.7 | 6.8 |
| Southeast Asia | 4.1 | 4.8 | 4.7 | 4.7 |
| Pacific | 4.7 | 4.2 | 3.9 | 3.6 |
Table 2: Inflation Forecasts (%)
| Region/Country | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|
| Developing Asia | 3.3 | 2.6 | 2.3 | 2.2 |
| China | 0.2 | 0.2 | 0.4 | 0.7 |
| India | 5.4 | 4.7 | 4.3 | 4.0 |
| Central Asia | 10.2 | 6.8 | 6.9 | 5.9 |
| Pacific | 3.1 | 1.9 | 3.4 | 3.7 |
Additional Context:
- Electronics exports, particularly semiconductors, grew 6.0% in 2024, buoying economies like Taiwan and Vietnam.
- Tourism recovery reached 90% of pre-pandemic levels, lagging in East Asia due to fewer Chinese travelers.
- Debt risks persist in Laos, Pakistan, and Sri Lanka, with ADB urging tighter fiscal management.
“While the region remains a global growth leader, policymakers must navigate trade volatility and inflation carefully,” Park said.