Asia's economic growth is accelerating despite mounting global trade tensions, according to new reports from the Asian Development Bank (ADB) and International Monetary Fund (IMF). While China and India lead regional expansion, analysts warn of diverging trajectories across subregions as US tariff policies cast uncertainty over long-term prospects.
The ADB's July Outlook revealed the Chinese mainland's GDP grew 5.4% in Q1 2024, maintaining momentum through strategic policy measures boosting consumption and exports. Industrial output remained robust, contributing to a 5.3% first-half growth rate. India followed closely with 7.4% Q1 expansion, driven by public infrastructure investments and export growth.
However, Southeast Asia's 2025 growth forecast was trimmed to 4.2%, reflecting weaker manufacturing demand. East Asia's projection fell to 4.3% for 2025 amid trade headwinds, while South Asia's outlook dipped to 5.9%. Pacific island nations face a 2026 downgrade to 3.5% growth due to anticipated tourism slowdowns.
The IMF's External Sector Report highlighted China's "encouraging" economic rebalancing but cautioned that recent US tariff increases could disrupt global supply chains. While immediate impacts appear limited, analysts note prolonged trade barriers might exacerbate regional disparities.
"Policy-driven growth in major economies is currently offsetting external pressures," said an ADB representative, speaking on condition of anonymity. "The challenge lies in sustaining domestic demand while navigating shifting trade dynamics."
Business leaders are closely monitoring cross-strait economic ties, particularly in technology and manufacturing sectors where tariff-sensitive supply chains span multiple Asian economies. The reports suggest companies are accelerating regional integration efforts to mitigate risks from protectionist measures.
