# Asia-Pacific Growth Holds Up Despite Rising Trade Risks, Says IMF - Link: https://www.thailand-business-news.com/economics/254251-asia-pacific-growth-holds-up-despite-rising-trade-risks-says-imf - Published: 2025-10-29T09:32:10+07:00 - Author: J. Allan The International Monetary Fund (IMF) is projecting resilience across the Asia-Pacific region even as new trade barriers and structural headwinds gather pace, according to its latest “Regional Economic Outlook: Asia and Pacific” released in October 2025.  * [Key takeaways](https://www.thailand-business-news.com/economics/254251-asia-pacific-growth-holds-up-despite-rising-trade-risks-says-imf#key-takeaways) - [Strong performance, caution ahead](https://www.thailand-business-news.com/economics/254251-asia-pacific-growth-holds-up-despite-rising-trade-risks-says-imf#strong-performance-caution-ahead) - [What’s Driving the Resilience](https://www.thailand-business-news.com/economics/254251-asia-pacific-growth-holds-up-despite-rising-trade-risks-says-imf#whats-driving-the-resilience) - [Major Country Snapshots](https://www.thailand-business-news.com/economics/254251-asia-pacific-growth-holds-up-despite-rising-trade-risks-says-imf#major-country-snapshots) - [Key Policy Prescriptions](https://www.thailand-business-news.com/economics/254251-asia-pacific-growth-holds-up-despite-rising-trade-risks-says-imf#key-policy-prescriptions) - [Risks to the Outlook](https://www.thailand-business-news.com/economics/254251-asia-pacific-growth-holds-up-despite-rising-trade-risks-says-imf#risks-to-the-outlook) - [Why it matters](https://www.thailand-business-news.com/economics/254251-asia-pacific-growth-holds-up-despite-rising-trade-risks-says-imf#why-it-matters) ## Key takeaways * Asia-Pacific remains the global growth engine, projected to expand by 4.5% in 2025 and contribute around 60% of worldwide growth despite mounting trade and structural challenges. * Export strength, policy support, and shifting supply chains underpin the region’s resilience, helping economies adapt to rising tariffs and global uncertainty. * The IMF warns sustained growth will require reform, urging countries to boost domestic demand, deepen regional integration, and tackle long-term issues like aging populations and weak productivity. ### Strong performance, caution ahead The [IMF](https://www.imf.org/en/Publications/REO/APAC/Issues/2025/10/24/regional-economic-outlook-for-asia-and-pacific-october-2025) forecasts the region will grow by approximately 4.5 % in 2025, before moderating to around 4.1 % in 2026. That rate not only keeps Asia-Pacific as the fastest-growing region globally, but also positions it to contribute roughly 60 % of global growth for 2025-26.  ADVERTISEMENT Yet the IMF stresses that this solid showing masks significant risks. The region remains vulnerable to escalating trade tensions, rising protectionism, and domestic structural issues such as aging populations, weak productivity growth and financial‐ sector inefficiencies.  ### What’s Driving the Resilience The IMF attributes Asia’s continued economic strength to three main factors. First, a surge in exports has bolstered output across several economies. Much of this has been driven by front-loaded shipments ahead of higher tariffs, alongside a sharp increase in technology-related investments, particularly in artificial intelligence and semiconductor goods. Second, accommodative monetary and fiscal policies have played a stabilizing role. Many governments in the region have maintained supportive fiscal positions or eased monetary conditions, providing a buffer against external shocks and sustaining consumer and business confidence. Finally, structural shifts in supply chains are reshaping trade patterns. As firms adapt to new tariff regimes and geopolitical uncertainties, intra-regional trade has expanded. This diversification of export destinations has helped reduce dependency on single markets and increased overall economic resilience. ### Major Country Snapshots The IMF report outlines a varied growth outlook across the region. China, the region’s largest economy, is expected to slow from around 4.8% in 2025 to roughly 4.2% in 2026, reflecting weaker property markets and subdued domestic demand. India continues to stand out as a regional outperformer, with growth projected at 6.6% in 2025, easing modestly to 6.2% in 2026, supported by strong investment and digital-driven productivity gains. ### Related**Posts** ### 󠀁[Thailand’s household debt crisis threatens to keep growth below potential despite lower debt ratios](https://www.thailand-business-news.com/finance/333212-thailands-household-debt-crisis-threatens-to-keep-growth-below-potential-despite-lower-debt-ratios)󠁿 ### 󠀁[World Bank raises Thailand’s 2026 growth outlook to 2% but warns AI dependence and climate risks remain](https://www.thailand-business-news.com/economics/332820-world-bank-raises-thailands-2026-growth-outlook-to-2-but-warns-ai-dependence-and-climate-risks-remain)󠁿 ### 󠀁[What Would an ASEAN-Canada Free Trade Agreement Mean for Foreign Investors?](https://www.thailand-business-news.com/asean/331504-what-would-an-asean-canada-free-trade-agreement-mean-for-foreign-investors)󠁿 ### 󠀁[The Changing Map of Growth: Why East Asia and the RCEP Are More Important Than Ever](https://www.thailand-business-news.com/opinion/328474-the-changing-map-of-growth-why-east-asia-and-the-rcep-are-more-important-than-ever)󠁿 Japan’s expansion is forecast to cool more sharply, from about 1.1% in 2025 to 0.6% in 2026, as export demand softens and demographic challenges deepen. Meanwhile, the ASEAN economies are projected to grow steadily at around 4.3% in both 2025 and 2026, driven by domestic consumption and manufacturing recovery, though uneven across member states. ### Key Policy Prescriptions In response to growing external pressures, the IMF urges policymakers in Asia and the Pacific to strengthen regional integration and economic resilience. A top priority is to accelerate regional economic integration by lowering trade barriers and promoting foreign direct investment, helping economies better withstand global shocks. The Fund also recommends improving financial intermediation by expanding credit access to smaller, more productive firms and addressing “ever-greening” practices, where unviable corporations continue to receive loans. Another crucial step is to rebalance growth toward domestic demand through services expansion, productivity improvements, and household consumption, reducing reliance on export-led models that are increasingly vulnerable to protectionist trends. Finally, the IMF highlights the need to address medium-term structural challenges, including population aging, sluggish labor-force growth, and weak productivity, which collectively threaten to cap long-term potential. ### Risks to the Outlook While the near-term picture remains positive, the IMF cautions that the region’s momentum could falter if certain risks materialize. Escalating trade tensions or new tariff barriers could disrupt export flows and supply chains, eroding competitiveness. Additionally, a tightening of global financial conditions could raise borrowing costs, slow investment, and expose financial vulnerabilities. Most importantly, failure to tackle underlying structural weaknesses, from demographic shifts to productivity stagnation, could result in slower growth and diminished returns on investment over time. In short, Asia’s resilience remains intact, but sustaining it will depend on decisive reforms and deeper regional cooperation in the face of mounting global uncertainty. ### Why it matters With Asia and the Pacific acting as the engine for global growth, any weakening in this region carries major implications for the world economy. The IMF report underscores that sustained expansion hinges not just on favourable near-term conditions, but on deep structural reforms and stronger regional cooperation. As one IMF official noted, “the resilience of Asia has held so far, but the negative effects of the higher tariff regime are yet to fully materialize.” In short: the region is punching above expectations, but the next phase may require more from policymakers than in the past.