MANILA: The Asian Development Bank (ADB) has lowered its growth outlook for developing Asia and the Pacific, warning that rising US tariffs and persistent global trade tensions are dampening the region's economic prospects.
In its latest Asian Development Outlook report released Wednesday, the ADB projected the region’s growth at 4.7% in 2025, down from its April forecast of 4.9%. The 2026 outlook was also reduced to 4.6% from 4.7%.
The Manila-based lender noted that domestic demand is likely to soften due to a mix of rising energy prices, geopolitical instability, supply chain disruptions, and continued uncertainty in China's property market. The overall external environment, it said, has become increasingly challenging.
“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.
Southeast Asia is expected to experience the sharpest slowdown, with the 2025 growth forecast slashed to 4.2% from 4.7%, and 2026 to 4.3%. Park urged regional economies to continue strengthening economic fundamentals and promoting open trade and integration to support long-term investment and job creation.
The ADB’s report covers 46 developing economies across Asia and the Pacific, including China, India, Indonesia, and the Philippines, but excludes advanced economies like Japan, Australia, and New Zealand.
The downgrade comes as former US President Donald Trump announced new tariff measures, including a 15% levy on Japanese exports and a 19% rate on goods from the Philippines. These actions are part of a broader policy of imposing tariffs on most US trading partners, with many countries now facing a baseline 10% tariff since April and further increases expected from August 1.
The ADB cautioned that prolonged trade tensions and tariff hikes could further strain regional growth, undermining recovery efforts post-pandemic.
