Asia’s economic growth is projected to slow to 3.9% in 2025 from 4.6% in 2024, marking the sharpest downgrade since the pandemic, according to the International Monetary Fund’s (IMF) April 2025 Regional Economic Outlook. The revision reflects weaker global demand, reduced trade, tighter financial conditions, and heightened uncertainty.
The IMF notes that the region’s export-led growth model faces mounting challenges due to surging trade tensions, particularly between the United States and China. US President Donald Trump’s administration has imposed tariffs of up to 145% on Chinese imports, prompting China to retaliate with tariffs of up to 125% on US goods.
These developments have disrupted global supply chains and dampened business sentiment across Asia. In Thailand, for instance, the Joint Standing Committee on Commerce, Industry and Banking has revised the country’s 2025 GDP growth forecast to 2.0%-2.2% from an earlier projection of 2.4%-2.9%, citing the adverse impact of US tariffs.
China’s growth is expected to slow to around 4% in 2025 and 2026, down from previous forecasts, as the negative impact of increased tariffs and trade policy uncertainty outweighs the effects of fiscal expansion. India’s growth is projected to moderate to 6.2% in 2025, reflecting its relatively lower exposure to global trade.
The IMF emphasises the need for Asia to boost economic resilience by strengthening regional economic ties and rebalancing growth models towards domestic demand. Structural reforms to enhance social safety nets, improve financial literacy, and foster private investment are recommended to support this transition.
Initiatives like the Regional Comprehensive Economic Partnership (RCEP) are seen as avenues to deepen cooperation in trade, services, and the digital economy, thereby insulating economies from global shocks. However, the IMF cautions that policy responses must be flexibly calibrated and tailored to individual country circumstances to navigate the current context of heightened uncertainty effectively.
