Slashed Asia-Pacific Economic Growth Prospects Predicted by ADB
The Asian Development Bank (ADB) has revised down its growth forecasts for economies in the Asia Pacific region, including Southeast Asia, for both 2025 and 2026. The revised forecasts, presented in the ADB's latest report, the Asian Development Outlook (ADO) July 2025, suggest a slower pace of economic growth.
According to the report, the region's economies are forecast to grow by 4.6% in 2025, a 0.2 percentage point decline from the projection issued in April. For 2026, the forecast has been lowered to 4.3%, a further decline from the earlier projection of 4.7%.
The primary factors driving this downward revision include rising global trade tensions and higher tariffs, especially from the United States, which reduce exports and create trade uncertainty. Geopolitical tensions and conflicts that disrupt global supply chains, elevated energy prices that raise costs, weakness in China's property market depressing demand and regional growth, weaker domestic demand in some countries contributing to slower growth, and supply chain challenges affecting regional manufacturing and trade flows are other significant factors.
ADB Chief Economist Albert Park emphasized the need for developing Asia to strengthen economic fundamentals, maintain open trade policies, and deepen regional integration to counter these risks and support growth, investment, and job creation.
Southeast Asia is expected to be the hardest hit, with growth projections down roughly half a percentage point from April forecasts for each year. India, the region's second-largest economy, is forecast to grow by 6.5% in 2025 and 6.7% in 2026, with a slight decrease from the April projections. Growth projections for the People's Republic of China (PRC), the region's largest economy, are maintained at 4.7% for 2025 and 4.3% for 2026.
The press release is related to the Asian Development Bank (ADB) and is categorized under the topics of Policy & Finance. It includes tags related to economy, investment, supply chain, trade, and multilateral development bank. The intended audience for the content published through EB Publishing are those who matter to the publisher.
Prospects for developing Asia and the Pacific could be further dented by an escalation of US tariffs and trade tensions. The ADB's report underscores the need for policymakers to address these challenges to ensure sustainable and inclusive growth in the region.
[1] Asian Development Bank (ADB). (2025). Asian Development Outlook (ADO) July 2025. [online] Available at: https://www.adb.org/sites/default/files/publication/604405/adb-adov2025.pdf
[2] Asian Development Bank (ADB). (2025). Press Release: ADB Lowers Growth Forecasts for Developing Asia and Pacific. [online] Available at: https://www.adb.org/news/adb-lowers-growth-forecasts-developing-asia-and-pacific
[3] EB Publishing. (2025). Content Publication: ADB Lowers Growth Forecasts for Developing Asia and Pacific. [online] Available at: https://ebpublishing.com/adb-lowers-growth-forecasts-for-developing-asia-and-pacific/
- In light of the Asian Development Bank (ADB) report, businesses in the Asia Pacific region may need to consider strategies that minimize trade uncertainty caused by rising global tariffs.
- Given the slower pace of economic growth forecasted by the ADB, fine-tuning finance strategies and investing in resilience against geopolitical risks could be crucial for the success of companies operating in the region.
