US tariffs, trade tensions to slow growth in developing Asia and Pacific: ADB
The region is forecast to grow by 4.7 per cent in 2025, down from an earlier projection of 4.9 per cent in April
[MANILA] Higher US tariffs and trade uncertainty have worsened the economic outlook for developing Asia and the Pacific, the Asian Development Bank (ADB) said in a report on Wednesday (Jul 23) as it lowered its growth forecasts for the region for this year and next.
Domestic demand is expected to weaken as factors including geopolitics, supply chain disruptions, rising energy prices and uncertainty in China’s property market buffer the region, the Asian Development Outlook report said.
The ADB cut its 2025 growth forecast for the region to 4.7 per cent from an earlier projection of 4.9 per cent made in April. The forecast for 2026 was trimmed to 4.6 per cent, from 4.7 per cent.
“Asia and the Pacific has weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,” said ADB chief economist Albert Park.
Among the subregions, South-east Asia was expected to slow the most, with growth now projected at 4.2 per cent in 2025 and 4.3 per cent in 2026, down from earlier forecasts of 4.7 per cent for both years.
“Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment, and growth,” Park said.
The ADB defines developing Asia and the Pacific as 46 economies ranging from China to Georgia to Samoa, and excluding countries such as Japan, Australia and New Zealand.
The forecasts were released shortly after US President Donald Trump said the US and Japan had struck a deal that includes a 15 per cent tariff on Japanese exports, lower than the threatened 25 per cent. Trump also announced a 19 per cent tariff for goods from the Philippines, below the threatened 20 per cent levy flagged earlier this month but still above a 17 per cent rate announced in April.
The US president has upended global trade flows with tariffs on nearly every trading partner, with almost all countries facing a 10 per cent tariff that took effect in April and many facing steep additional tariffs from Aug 1.
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