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A Longer View: East Asia and Pacific Economic Update, April 2025

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Developing East Asia and Pacific (EAP) is growing faster than the rest of the world but slower than before the pandemic.

The World Bank projects that growth in EAP will slow down to 4.0 percent in 2025 from 5.0 percent in 2024. Growth prospects for countries in the region in 2025 are as follows: China at 4.0 percent; Cambodia at 4.0 percent; Indonesia at 4.7 percent; Malaysia at 3.9 percent; Mongolia at 6.3 percent; Lao PDR at 3.5 percent; the Philippines at 5.3 percent; Thailand at 1.6 percent; and Viet Nam at 5.8 percent. Growth in the Pacific Island countries is projected at 2.5 percent.

Uncertainty around these projections remains high, and growth outcomes will depend on global developments and national policy choices.

Economic performance in the region is being shaped by three critical external developments:

Increasing global economic policy uncertainty, especially regarding trade

Global economic policy uncertainty index and trade policy uncertainty index tracks frequency of uncertainty-related articles

Increasing trade restrictions

 The chart shows exports to the US as a share of GDP (excluding tariff-exempt products), the domestic value-added in exports

Slowing global growth

The bar chart compares GDP growth forecasts for major advanced economies on January and April 2025, highlighting revisions ov

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Short-term uncertainty should not obscure long-term trends in global economic integration, the environment, and demographics that will affect trade, growth, and jobs in the EAP region.

EAP Update Apr 2025 Chart 9A

EAP Update Apr 2025 Chart 10A

EAP Update Apr 2025 Chart 11A

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Three-pronged policy response

To address these challenges, countries must harness technological change, pursue domestic reforms, and deepen international cooperation.

Including:

(1) Policies to support labor markets harness the productivity potential of new digital technologies.

(2) Policies to support firms leverage new technologies and help spur EAP firms productivity so they can catch up with global leaders.

(3) Policies to harness the potential of services to drive economy-wide growth and job creation

(4) Policies to face up to the major challenges of de-globalization, aging and climate change

(5) Policies to address new and old distortions in the areas of food, fuel and finance.

(6) Policies to encourage technology diffusion and adoption

(7) Creating opportunities for firms and ensuring inclusion to promote equitable growth;

(8) Trade reform, especially of still-protected services sectors—finance, transport, communications—to enhance firm productivity, avert pressures to protect other sectors, and equip people to take advantage of the digital opportunities whose emergence the pandemic is accelerating;

(9) Financial sector policies to support relief and recovery without undermining financial stability;

(10) Support for firms to prevent bankruptcies and unemployment, without unduly inhibiting the efficient reallocation of workers and resources;

(11) Social protection to help households smooth consumption and workers reintegrate as countries recover;

(12) Smart schooling to prevent long-term losses of human capital, especially for the poor;

(13) Smart containment of COVID-19, especially through non-pharmaceutical interventions like testing-tracing-isolation;

(14) Climate policy to build back better;

(15) Fiscal policy for relief, recovery, and growth;

(16) Vaccination to contain COVID-19;