Most APAC Nations To See Strong Growth In 2025, China To Take Hit

New Delhi: Much of the Asia-Pacific region is expected to grow solidly in the first quarter of 2025, although China will take a big hit due to the challenges posed by the new US administration to be headed by Donald Trump, according to an S&P Global report released on Monday.

Higher US tariffs on Chinese exports would make other Asian economies more competitive in the US and they may attract more foreign direct investment, including from US firms, said the report.

It stated that a gradual fall in interest rates and inflation should ease their drag on spending power, allowing growth to pick up in 2025 in several Aia-Pacific economies. In emerging markets, robust domestic demand growth is generally supporting solid overall growth, even as it is moderating in some.

While much of the Asia-Pacific region should be able to continue to grow solidly, central banks will probably remain cautious by not reducing their policy rates too fast. The impending change in the US administration will be challenging for China and the rest of Asia-Pacific.

“US tariff increases have become more likely, especially on China, and possible changes in the U.S. macro picture are leading to different interest rate expectations. And risks have gone up due to slower global demand and US trade policy,” the report pointed out.