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IMF Cuts Asia's Growth Forecast as U.S. Tariffs Heighten Trade Uncertainty

The IMF projects Asia's growth to slow to 3.9% in 2025, urging monetary easing, domestic demand support, and investment reforms to mitigate external shocks.

A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., U.S., November 24, 2024. REUTERS/Benoit Tessier/File Photo
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Krishna Srinivasan, director of the International Monetary Fund's Asia and Pacific Department, speaks during a press conference at the 2025 annual IMF/World Bank Spring Meetings in Washington on April 24, 2025 in this photo released by Reuters. (Yonhap)
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Overview

  • The IMF lowered Asia's growth forecast to 3.9% in 2025 and 4.0% in 2026, down from 4.6% in 2024, citing heightened trade uncertainty from U.S. tariffs.
  • Asian economies are more exposed to U.S. trade policy shocks due to their high openness and deep integration into global supply chains.
  • With inflation at or below target in most Asian economies, central banks have room to ease monetary policy to cushion external shocks.
  • The IMF emphasized the need for Asia-Pacific nations to boost domestic demand, expand intra-regional trade, and implement structural reforms to strengthen resilience.
  • India, projected to grow at 6.2% in 2025, must significantly increase private investment to achieve its Viksit Bharat 2047 development goals.