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You are here: Home / cat / Developing Asia-Pacific Economic Growth to Slow Due to Changing Global Trade Landscape

Developing Asia-Pacific Economic Growth to Slow Due to Changing Global Trade Landscape

Dated: September 30, 2025

The Asian Development Bank (ADB) has slightly lowered its growth projections for developing Asia and the Pacific amid a shifting global trade environment shaped by tariffs and updated trade agreements. Economies in the region are now expected to grow by 4.8% in 2025 and 4.5% in 2026, down from the April forecasts of 4.9% and 4.7%, respectively. Higher tariffs from the United States and elevated trade uncertainty are key factors weighing on regional growth. Inflation is projected to ease to 1.7% this year due to lower food and energy prices, before rising modestly to 2.1% next year as food prices normalize.

ADB Chief Economist Albert Park noted that despite resilient growth driven by strong exports and robust domestic demand, the worsened external environment is affecting the outlook. He emphasized the importance of sound macroeconomic management, openness, and regional integration in navigating the new global trade environment.

Growth forecasts for the People’s Republic of China remain unchanged, with policy support expected to mitigate the effects of high tariffs and continued weakness in the property market. China’s economy is projected to expand by 4.7% in 2025 and 4.3% in 2026. In contrast, India’s growth outlook has been downgraded due to steep US tariffs on its exports starting in August, with projected growth now at 6.5% for both 2025 and 2026, compared with earlier forecasts of 6.7% and 6.8%.

Southeast Asian economies face the largest downward revisions, with growth now forecasted at 4.3% for both 2025 and 2026 amid weaker global demand and heightened trade uncertainty. For the Caucasus and Central Asia, growth this year has been slightly upgraded to 5.5%, while next year’s projection is lowered to 4.9% due to reduced oil and gas output. Pacific economies are expected to grow 4.1% this year on stronger mining output, but growth is projected to slow to 3.4% in 2026 as resource output and commodity exports weaken.

Key risks to the region’s outlook include ongoing uncertainty around US trade policy, unresolved US–China trade negotiations, geopolitical tensions, potential deterioration in China’s property market, and possible financial market volatility.

ADB, established in 1966 and owned by 69 members, supports inclusive, resilient, and sustainable growth across Asia and the Pacific. The bank works with its members and partners to address complex challenges through innovative financial tools and strategic partnerships, aiming to improve infrastructure, enhance lives, and safeguard the environment.

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