Economies in developing Asia and the Pacific are projected to grow 4.9% this year, down from 5.0% last year, according to the latest forecast by the Asian Development Bank (ADB).
In a news release, ADB said solid domestic demand and strong global appetite for semiconductors driven by the artificial intelligence boom are supporting growth, but tariffs and trade uncertainty will act as a headwind.
Regional growth is expected to decline further to 4.7% next year, according to Asian Development Outlook (ADO) April 2025, released today.
Inflation is projected to moderate to 2.3% this year and 2.2% next year as global food and energy prices continue to decline.
The growth forecasts were finalized prior to the April 2 announcement of new tariffs by the US administration, so the baseline projections only reflect tariffs that were in place previously. However, ADO April 2025 does feature an analysis of how higher tariffs may affect growth in Asia and the Pacific.
The report notes that 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.
“Economies in developing Asia and the Pacific are supported by strong fundamentals, which are underpinning their resilience in this challenging global environment,” said ADB Chief Economist Albert Park.
“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.”
For ADB’s latest economic forecasts for Asia and the Pacific, please see the links: Economic Outlook web page and ADO April 2025 report/publication.
