New Delhi
Most Asia-Pacific countries are expected to witness strong economic growth in 2025, while China is likely to face significant challenges due to shifts in US trade policies under the new administration of Donald Trump, according to a report on Monday.
The report highlights that higher US tariffs on Chinese exports may benefit other Asian economies, making them more competitive in the US market and attracting increased foreign direct investment, including from American firms.
Falling interest rates and easing inflation across the region are expected to boost consumer spending, supporting growth. However, central banks in Asia-Pacific are likely to remain cautious, delaying significant rate cuts to mitigate risks from global uncertainties. China’s economy is projected to grow at 4.1% in 2025, a slowdown driven by potential new US tariffs and weaker global demand.
The report also emphasizes the impact of US monetary policy. The Federal Reserve is expected to implement fewer rate cuts in 2025, with the policy rate likely reaching 3%-3.25% by late 2026. The terminal level for Asia-Pacific central banks is anticipated at 2.5% in early 2025.
Uncertainties around US growth, inflation, and trade policies remain a key risk for the global economy. Increased trade restrictions could escalate tensions, affecting capital flows and economic stability in the region.
While China’s stimulus measures aim to offset challenges, the broader Asia-Pacific region is poised for steady growth, driven by competitive markets and strong domestic demand.
