ADB Projects Economic Growth In Asia Pacific To Drop To 4.9 Percent This Year

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JAKARTA - The Asian Development Bank (ADB) projects economic growth in Asia and the Pacific region, which is developing, reaching 4.9 percent in 2025 or a decrease compared to 2024 of 5 percent.

"The increase in tariffs, uncertainty about United States policies, and the possibility of increasing geopolitical tensions are significant challenges to economic prospects," said ADB Chief Economist Albert Park in a statement in Jakarta, quoted by Antara, Wednesday, April 9.

According to Albert, the economy in the Asian region must maintain their commitment to opening trade and investment, which has supported the growth and resilience of the region.

"Various economies in the Asia and Pacific region that are developing are supported by strong fundamentals, thus becoming the basis for toughness in the midst of this challenging global environment," he said.

Furthermore, Albert said solid domestic demand and strong global demand for semiconductors driven by increased artificial intelligence supported growth, but tariffs and trade uncertainty were obstacles.

According to the April 2025 Asian Development Outlook (ADO) released today, regional growth is expected to fall further to 4.7 percent in 2026. Inflation is projected to decline to 2.3 percent this year and 2.2 percent next year as global food and energy prices continue to decline.

The growth forecast was drawn up before the announcement of a new tariff by the United States Government on April 2, 2025, so basic projections only reflect previously applicable rates. However, ADO April 2025 featured an analysis of how higher rates could affect growth in Asia and the Pacific.

The report notes that although the economy in the region is quite resilient, changes that are faster and bigger than expected in US trade and economic policies pose a risk to prospects.

Along with the increase in US rates, increasing policy uncertainty and retaliatory measures could slow trade, investment and growth.

The further decline in the Chinese property market, the region's largest economy, can also be a barrier to growth.

ADB projects China will grow 4.7 percent this year and 4.3 percent next year, compared to 5 percent last year.

Stronger growth in South Asia and Southeast Asia, driven by domestic demand, and continued tourism recovery in other parts of the region, will offset some of China's slowdown.

India, which is the largest economy in South Asia, is projected to grow 6.7 percent this year and 6.8 percent next year. The economy in Southeast Asia is expected to grow 4.7 percent this year and next year.

Weak external demand is expected to be burdensome for economic activity in the Kaukasus and Central Asia regions, so growth is projected to slow from 5.7 percent in 2024 to 5.4 percent this year and 5 percent next year.

In the Pacific, tourism continues to support growth, but with a slower pace, which is estimated at 3.9 percent this year and 3.6 percent next year, compared to 4.2 percent last year.

ADB is a leading multilateral development bank that supports sustainable, inclusive, and resilient growth in Asia and the Pacific.

In collaboration with its members and partners to tackle complex challenges together, ADB utilizes innovative financial devices and strategic partnerships to change lives, build quality infrastructure, and protect the earth.

Founded in 1966, ADB consists of 69 members, of which 49 are in the Asia and Pacific region.