Asia Pacific sees slight growth downgrade on US trade policies, China steady – ADB
2024.12.10 21:10
Investing.com– Asia Pacific’s economic growth is expected to be slightly lower than the previous projections, as potential policy shifts in the U.S. under incoming President Donald Trump could impact the region’s long-term outlook, the Asian Development Bank (ADB) said on Wednesday.
According to the ADB, developing Asia and the Pacific is projected to grow by 4.9% in 2024, slightly below its September forecast of 5.0%. Growth for 2025 is now estimated at 4.8%, a modest downgrade from the earlier projection of 4.9%, due to weaker domestic demand in South Asia.
Inflation forecasts have also been revised down to 2.7% for 2024 and 2.6% for 2025, partly reflecting anticipated moderation in oil prices.
“Strong overall domestic demand and exports continue to drive economic expansion in our region,” said ADB Chief Economist Albert Park.
“However, the policies expected to be implemented by the new US administration could slow growth and boost inflation to some extent in the People’s Republic of China (PRC), most likely after next year, also impacting other economies in Asia and the Pacific,” he added.
China’s growth forecast remains steady at 4.8% for 2024 and 4.5% for 2025, according to ADB, while India’s growth estimates have been lowered to 6.5% this year and 7.0% next year due to weaker private investment.
Southeast Asia’s outlook has been upgraded to 4.7% for 2024, driven by strong manufacturing exports and public capital spending.
The bank highlights risks 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-based tariffs, reduced immigration, and expansionary fiscal measures could disrupt global trade and rekindle inflation in the U.S., though the impacts on Asia-Pacific are expected to remain limited.
The bank cautions that additional risks, including geopolitical tensions and China’s property market fragility, could cloud the region’s outlook.
