Economic Growth Projections in Asia Pacific

Investing.com– Asia Pacific's economic growth is expected to be slightly lower than previous projections due to potential policy shifts in the U.S. under incoming President Donald Trump, as noted by the Asian Development Bank (ADB) on Wednesday.

Growth Forecasts

According to the ADB, developing Asia and the Pacific is projected to grow by 4.9% in 2024, a slight decrease from its September forecast of 5.0%. Growth for 2025 is now estimated at 4.8%, down from an earlier projection of 4.9%, primarily due to weaker domestic demand in South Asia.

Inflation forecasts have also been adjusted, now predicted at 2.7% for 2024 and 2.6% for 2025, reflecting anticipated moderation in oil prices.

ADB Chief Economist's Insights

“Strong overall domestic demand and exports continue to drive economic expansion in our region,” stated ADB Chief Economist Albert Park.

“However, policies expected to be implemented by the new U.S. administration could slow growth and potentially boost inflation in the People’s Republic of China (PRC) after next year, which could also affect other economies in Asia and the Pacific,” he added.

Country-Specific Forecasts

• China’s growth forecast remains steady at 4.8% for 2024 and 4.5% for 2025.
• India’s growth estimates have been lowered to 6.5% this year and 7.0% next year, mainly due to weaker private investment.
• Southeast Asia's outlook has been improved to 4.7% for 2024, driven by strong manufacturing exports and public capital spending.

Risks to the Outlook

The report highlights risks stemming from U.S. trade, fiscal, and immigration policies, which could weaken global economic growth by 0.5 percentage points over four years under a high-risk scenario. Broad tariffs, reduced immigration, and expansionary fiscal measures could disrupt global trade and rekindle inflation in the U.S., although impacts on Asia-Pacific are expected to be limited.

The bank also cautions that additional risks include geopolitical tensions and fragility in China’s property market, which could cloud the region’s outlook.