The International Monetary Fund (IMF) cautioned on Friday that Asia’s annual economic expansion could ease to 4.5% in 2025, despite the region delivering a robust performance in the first half of the year.
This outlook was presented in the IMF’s Regional Economic Outlook for Asia and Pacific 2025, which highlighted that Asia, while continuing to outpace other global regions, will likely see momentum cool in the latter half of the year. The projected growth rate is marginally lower than last year’s 4.6%, with the IMF further anticipating a slowdown to 4.1% in 2026.
In its latest report, the IMF also revised upward its growth estimate for Hong Kong, reflecting stronger local conditions.
According to Thomas Helbling, deputy director of the IMF’s Asia and Pacific department, the region has demonstrated resilience amid higher tariffs and global uncertainties. Nevertheless, Helbling identified several ongoing headwinds, including demographic shifts and a sustained decline in productivity, as persistent risks to the outlook.
The IMF indicated that geopolitical and trade policy fragilities pose additional obstacles, warning of the potential for increased risk premiums and a rise in interest rates if trade tensions or political uncertainties worsen.
Helbling recommended that regional policymakers address these vulnerabilities by deploying monetary measures, such as reducing interest rates, alongside targeted fiscal support to strengthen domestic demand and fortify social safety nets. The IMF also underscored the importance of regulatory reforms to unlock private sector growth potential.
Turning to Hong Kong, Helbling noted that the city’s status as an international financial centre is underpinned by robust regulation, a skilled workforce, and strong digital and logistical infrastructure. The IMF believes that by maintaining these competitive advantages, Hong Kong remains well-positioned to leverage opportunities within the wider region.
Earlier in the year, the IMF lifted its 2025 growth forecast for Hong Kong to 2.4%, up 0.9 percentage points from its previous estimate in April.
