The Asian Development Outlook (ADO) from the Asian Development Bank analyzes the developing economies of Asia and the Pacific. In 2024, despite weak consumption in China, the region maintained solid growth thanks to exports and investment. Inflation fell to pre-pandemic levels, and tourism recovered to nearly 90% of pre-pandemic levels. However, uncertainty persists, especially due to the complicated relationship with the United States.
China Outlook
For 2025 and 2026, China's growth is expected to be moderate, at rates of 4,7% and 4,3%, due to a weak real estate sector and a drop in exports stemming from the US tariff policy. The government has responded with an expansionary fiscal policy focused on strategic investment, advanced manufacturing, and support for SMEs. The government will attempt to stimulate domestic consumption through increased public spending and subsidies. Inflation will remain low due to weak domestic demand, while the labor market will remain stable, with job creation in key sectors. However, risks remain due to trade tensions and disruptions in supply chains. Overall, China is seeking to maintain growth and stability in the face of a challenging external environment.
South Korea Perspectives
For 2025, South Korea projects slower economic growth of 1,5%, with a slight recovery to 1,9% in 2026, due to weak domestic demand, a fragile real estate sector, and lower business confidence. Exports, especially of artificial intelligence-driven semiconductors, will remain key, but at a moderate pace due to global competition. Inflation will remain low and stable around 1,9%. In the long term, it faces structural challenges such as an aging population and external risks related to trade and geopolitical tensions, which could affect its growth and fiscal stability.
Perspectives within ASEAN
Cambodia
Cambodia's economy is expected to grow 6,1% in 2025 and 6,2% in 2026, driven by external demand for manufactured goods and a recovery in tourism. Industry, especially garments, is the main driver of the economy, with projected annual growth of 9,3%. Services are expected to grow 4,4%, and agriculture will advance slightly, supported by exports. Public debt remains stable at around 26% of GDP, and the projected fiscal deficit for 2025 is 3%. The government has adopted a new strategy to increase revenue and ensure fiscal sustainability.
Indonesia
Indonesia's economy is projected to grow by 5,0% in 2025 and 5,1% in 2026, driven by domestic demand, private consumption, and rising investment. Growth will be led by sectors such as manufacturing, agriculture, services, and transportation. Inflation will remain stable at around 2%, within the official target, thanks to improvements in productivity and logistics. Consumption will remain strong due to the increase in the minimum wage and new social programs, while investment will grow, supported by strategic projects and foreign capital.
Malaysia
According to the report, Malaysia's economy is projected to grow by 4,9% in 2025 and 4,8% in 2026, driven by investment, the construction sector, domestic consumption, manufacturing, and exports.
Malaysia's credit rating will remain stable (BBB+ and A3), reflecting its economic strength. However, external risks such as the slowdown in the US and China, trade tensions, and political uncertainty could impact growth and trade prospects.
Work shirts / service shirts
For the Philippines, GDP is projected to grow 6,0% in 2025 and 6,1% in 2026, driven by domestic demand, public investment, and structural reforms. Inflation is expected to remain moderate (3%), and employment will remain strong, with 2,6 million new jobs, primarily in services. Tourism and private consumption will continue to support growth.
Key reforms such as the CREATE MORE Act, which reduces corporate tax and improves the public-private partnership framework, can have a significant impact on the country's development. The Philippines' 2025 budget grew by 9,7%, with priority given to social services.
Thanks to increased revenue and spending efficiency, the fiscal deficit will gradually narrow. However, challenges such as underemployment, youth unemployment, and external risks like geopolitical tensions and climate change persist.
Singapore
Singapore's GDP growth is expected to moderate from 2,6% in 2025 to 2,4% in 2026, affected by global uncertainty. The drive will come from manufacturing and services, while domestic demand and public spending will remain strong. The government forecasts a primary deficit of 1% of GDP.
Exports are showing signs of weakening, and inflation is expected to fall to 2% in 2025 and 1,7% in 2026, thanks to lower commodity prices. Still, geopolitical and trade tensions could affect confidence and growth.
Thailand
Thailand's economy is projected to grow by 2,8% in 2025 and 2,9% in 2026, driven primarily by tourism, aided by visa exemptions and expanded air routes. Although private consumption could slow due to high household debt, fiscal measures such as tax breaks and cash transfers will help offset this.
Private investment will grow moderately, supported by the recovery of exports and greater incentives, especially in technology. Public spending will normalize, allowing for progress in key infrastructure. The agricultural and manufacturing sectors will also grow, although the latter faces competition from cheap imports from China. Inflation will remain low, around 1%. Overall, moderate and stable growth is expected, with some external and internal risks.
Vietnam
Vietnam's economy is projected to grow by 6,6% in 2025 and 6,5% in 2026, with the potential for further growth if institutional reforms are implemented quickly. The services sector, driven by tourism and technology, is projected to grow by 7,2%, while agriculture is projected to maintain solid growth at 3,2%. However, challenges such as climate change and infrastructure deficiencies persist.
Retail sales increased by 9,4%, albeit below expectations, and inflation, projected at around 4%, limits monetary easing. The government launched an ambitious plan to achieve 8% growth by 2025 and 10% annually starting in 2026, with a total investment of $174.000 billion. However, external risks such as trade tensions, geopolitical conflicts, and tariffs could affect economic performance.
Department of Economics and Business Casa Asia
