Finance
US tariffs, China slowdown cloud developing Asia's growth outlook, says ADB
Published by Global Banking & Finance Review®
Posted on April 9, 2025
4 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on April 9, 2025
4 min readLast updated: January 24, 2026
ADB warns US tariffs and China's slowdown could cut developing Asia's growth, projecting a GDP decrease by 2026.
MANILA (Reuters) - The full implementation of U.S. tariffs could cut developing Asia's growth by about a third of a percentage point this year and nearly a full percentage point in 2026, the Asian Development Bank said on Wednesday.
In its Asian Development Outlook report, the ADB projected that growth in developing Asia will ease slightly to 4.9% in 2025 — the slowest pace since 2022 — and slow further to 4.7% in 2026, from 5.0% in 2024.
The forecasts were finalised before the U.S. unveiled sweeping new import tariffs last week, the ADB said at a press conference for the report's release.
"The elephant in the room is clearly whether the U.S. tariffs will be fully implemented, which would lead to lower growth in our baseline forecast," ADB chief economist Albert Park said.
Developing Asia, as defined by the ADB, is made up of 46 Asia-Pacific countries stretching from Georgia to Samoa - and excludes countries such as Japan, Australia and New Zealand.
Park said the eventual effects of the U.S. tariffs remain uncertain, as their scope and timing could change due to negotiations, delays, or exemptions being granted.
"On the flip side, stronger retaliation and further escalation could result in bigger impacts," he said.
"Additionally, the size and speed of policy changes under the new U.S. administration could reduce investment globally and in the region, while rising trade tensions and fragmentation would boost trade costs and disrupt global supply chains."
The weaker baseline projections already reflect an expected slowdown in China, with growth forecast at 4.7% this year, down from 5.0% in 2024, and slowing further to 4.3% in 2026.
Southeast Asia, which benefited from trade diversion during the 2018 U.S.-China trade war, is expected to lose some steam with growth in the subregion seen at 4.7% this year and next, down slightly from 4.8% in 2024.
A bright spot is South Asia, the ADB said, where strong domestic demand is projected to drive growth of 6.0% in 2025 and 6.2% in 2026, up from last year's 5.8%.
Sustained global demand for semiconductors should help underpin growth in developing Asia.
Regional inflation is forecast to ease to 2.3% this year and 2.2% next year, from 2.6% in 2024, due to falling prices of global oil and other commodities. This should allow central banks to continue monetary easing, the ADB said, although at a slower pace given expectations the U.S. Federal Reserve would keep rates elevated for longer.
GDP GROWTH 2023 2025 2025 2026
2024
DEC APRI APRI
L L
Caucasus and 5.3
Central Asia
5.4 5.7 5.4 5.0
East Asia 4.8 4.2
4.7 4.4 4.0
China 5.4 4.5 4.7 4.3
5.0
South Asia 7.8 6.3 6.0 6.2
5.8
India 9.2 7.0 6.7 6.8
6.4
Southeast 4.1 4.7 4.7 4.7
Asia
4.8
Indonesia 5.0 5.0 5.0 5.1
5.0
Malaysia 3.6 4.6 4.9 4.8
5.1
Myanmar 0.8 n/a 1.1 1.6
-0.7
Philippines 6.2 6.0 6.1
5.5 5.6
Singapore 1.8 2.6 2.6 2.4
4.4
Thailand 2.0 2.7 2.8 2.9
2.5
Vietnam 6.6 6.6 6.5
5.1 7.1
The Pacific 4.7 4.1 3.9 3.6
4.2
Developing 5.5 4.8 4.9 4.7
Asia
5.0
INFLATION
Caucasus and 10.2 6.2 6.9 5.9
Central Asia
6.8
East Asia 0.6 1.1 0.6 0.9
0.5
China 0.2 0.9 0.4 0.7
0.2
South Asia 7.9 5.4 4.9 4.5
6.6
India 5.4 4.3 4.3 4.0
4.7
Southeast 4.2 3.1 3.0 2.8
Asia
3.0
Indonesia 3.7 2.8 2.0 2.0
2.3
Malaysia 2.5 2.6 2.5 2.5
1.8
Myanmar 27.5 n/a 29.3 20.0
27.8
Philippines 6.0 3.2 3.0 3.0
3.2
Singapore 4.8 2.2 2.0 1.7
2.4
Thailand 1.2 1.2 1.0 1.1
0.4
Vietnam 3.3 4.0 4.0 4.2
3.6
The Pacific 3.1 4.1 3.4 3.7
1.9
Developing 3.3 2.6 2.3 2.2
Asia
2.6
(Reporting by Karen Lema)
The article discusses the impact of US tariffs and China's economic slowdown on developing Asia's growth outlook.
US tariffs could reduce developing Asia's growth by about a third of a percentage point this year and nearly a full percentage point by 2026.
The ADB projects China's growth to slow from 5.0% in 2024 to 4.3% in 2026.
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