According to the latest forecast from the Asian Development Bank (ADB), the economy of developing Asia-Pacific countries is expected to grow by 4.9% this year, compared to 5.0% last year, as reported on adb.org.
Strong domestic demand and robust global demand for semiconductors driven by the artificial intelligence boom are supporting growth, but tariffs and trade uncertainty will act as headwinds. Regional growth is expected to continue slowing to 4.7% next year, according to the April 2025 Asian Development Outlook (ADO) released today. Inflation is projected to decline to 2.3% this year and 2.2% next year, as global food and energy prices continue to fall.
Further deterioration in the real estate market of the People’s Republic of China (PRC), the region’s largest economy, could also hinder growth. The ADB forecasts growth in the PRC at 4.7% this year and 4.3% next year, compared to 5.0% last year.
Stronger growth in South and Southeast Asia, driven by domestic demand, along with a continued recovery in tourism across other parts of the region, is expected to partially offset the slowdown in the PRC. India — the largest economy in South Asia — is projected to grow by 6.7% this year and 6.8% next year. Southeast Asian economies are forecast to grow by 4.7% both this year and next.
Weak external demand is expected to put pressure on economic activity in the Caucasus and Central Asia, where growth is projected to slow from 5.7% last year to 5.4% this year and 5.0% next year. In the Pacific region, tourism will continue to support growth, but at a slower pace, with forecasts of 3.9% this year and 3.6% next year, compared to 4.2% last year.
The ADB has raised its GDP forecast for Azerbaijan, expecting it to grow by 3.4% in 2025 and 3.3% in 2026 (with inflation rates of 2.2% and 4.2%, respectively).
The growth forecasts were finalized before the announcement of new tariffs by the U.S. administration on April 2, so the baseline projections reflect only the tariffs that were in effect prior to that.
The ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth in the Asia-Pacific region. Founded in 1966, the ADB is owned by 69 members, 49 of which are from the Asia-Pacific region.
