S&P Global Expects Growth Slowdown in Asia-Pacific Economies for 2025 and 2026

According to S&P Global economists, the growth of the Asia-Pacific (APAC) region is expected to be disrupted by slowing global demand and U.S. trade policies. However, Louis Kuijs and Vishrut Rana noted that low interest rates and inflation will alleviate pressure on purchasing power. They indicated that solid domestic demand could support growth in some emerging markets, but they forecasted that growth in India would decline to 6.8% this fiscal year due to high interest rates reducing urban demand.

In Japan, S&P predicts a 0.3% decrease in GDP for 2024, but believes that household income and consumption will improve as wages rise. They forecast annualized quarterly GDP growth to be 1.2% by the end of 2025.

For South Korea and Taiwan, S&P anticipates a slight easing in GDP growth in 2025 due to softer export growth, adjusting its forecast for APAC's GDP in 2024 to 4.5%, compared to the previously projected 4.4% in September. The projection for this rate is expected to decline to 4.2% in 2025 and 4.1% in 2026.