Asia Key Themes 2025: Global shocks and domestic resilience

While the fear of US tariffs has surged, China’s fiscal response to its ongoing slowdown is yet to arrive. Meanwhile, financial markets have already reacted, with Asian currencies depreciating and bond yields rising. Most likely, 2025 could well be a year of slower growth and more stubborn inflation than most believe.

In our Research Briefing, we delve into four key questions shaping the economic outlook for Asia in 2025:

• What factors will influence Asia’s economic outlook in 2025? What is the likely outlook for economies in the region and financial markets? The threat of tariffs, higher-than-expected US yields, and a stronger US dollar will all add to the stress not just on Asian currencies but also on monetary policy.
• How will China navigate its economic challenges, and what impact could this have on the region? The Chinese economy is in a “balance sheet downturn”, making monetary policy largely ineffective. The road in 2025 is likely to be a bumpy one, with cyclical and structural pressures, and likely increased tariffs. The fiscal response, expected early next year, will be crucial.
• Is the optimism surrounding India’s economic outlook justified? Could India benefit from Trump’s China policy? India’s economic outlook is buoyant, but the exuberance may be getting carried away.
• To what extend will the rise of Artificial Intelligence (AI) benefit Taiwan, South Korea and Malaysia, and will this trend endure? The current boom in AI is propelling exports from Taiwan, South Korea and Malaysia. We think there are risks should the boom falter.

Download the full report to uncover the detailed insights.