2025年亚洲发展展望（12月版）

ASIANDEVELOPMENTOUTLOOK

DECEMBER2025

GROWTHSTEADIESBUTUNCERTAINTYLINGERS

HIGHLIGHTS

The2025growthforecastforeconomiesindevelopingAsiaandthePacific(developingAsia)israisedby0.3percentagepointsfromSeptember,to5.1%.Theupgradeisduetostronger-than-expectedgrowthinIndia,drivenbyrobustdomesticconsumption,andsolidexportperformanceintheregion’shigh-incometechnology-exportingeconomies.

The2026growthforecastisalsorevisedupby0.1percentagepoints,onreducedtradeuncertaintyfollowingtheconclusionofseveraltradeagreements.However,regionalgrowthisexpectedtoslowto4.6%nextyear,dentedbyhigherUStarifsandweakerglobaleconomicactivity.

Robustexternaldemand,particularlyforelectronics-relatedproducts,promptedupwardrevisionstogrowthprojectionsforEastAsia,to4.6%in2025and4.1%in2026.

GrowthinSouthAsiaisnowforecastat6.5%in2025,upby0.6percentagepoints,onanimprovedoutlookforIndia.The2026projectionisunchangedat6.0%.

SoutheastAsia’sgrowthprojectionsarealsorevisedup,to4.5%in2025—reflectingastrongthird-quarterperformanceinIndonesia,Malaysia,Singapore,andVietNam—andto4.4%in2026,onanimprovedexternalenvironmentand

supportivepublicspending.

GrowthforecastsfortheCaucasusandCentralAsiaareupgradedto5.8%in2025andto5.0%in2026,supportedbystrongpublicinvestment,risingremittances,robustdomesticdemand,andstablemacroeconomicconditions.GrowthforecastsforthePacificareheldsteady,at4.1%in2025and3.4%in2026.

InflationindevelopingAsiaisexpectedtoeasefurtherto1.6%in2025,downfrom1.7%projectedinSeptember,mainlyreflectinglower-than-expectedfoodinflationinIndia.The2026inflationforecastremainsunchangedat2.1%.

Renewedtariftensionsandtradepolicyuncertainty,andhigherfinancialmarketvolatility,remainkeyrisks.Geopolitical

pressuresandweaknessinthePeople’sRepublicofChina’spropertymarketcouldalsoweighontheregion’sgrowthoutlook.

TherecentdevelopmentssectionwaswrittenbyMelanieQuintos,NedelynMagtibay-Ramos,EdKieranReyes,ShielaCamingue-Romance,Patrick

JaimeSimba,andMaiLinVillaruelundertheguidanceofAbdulAbiad,JohnBeirne,andMatteoLanzafameoftheEconomicResearchandDevelopmentImpactDepartment(ERDI).TheAsianDevelopmentBankRegionalEconomicOutlookTaskForceledthepreparationoftherevisedsubregionaloutlook.ThetaskforceischairedbyERDIandincludesrepresentativesoftheCentralandWestAsiaDepartment,EastAsiaDepartment,PacificDepartment,

SouthAsiaDepartment,andSoutheastAsiaDepartment.ADBplaceditsregularassistancetoAfghanistanonholdeffective15August2021.Effective

1February2021,ADBplacedatemporaryholdonsovereignprojectdisbursementsandnewcontractsinMyanmar.TheboxonrecentUStariffcutswaswrittenbyJulesHugotandEdKieranReyesofERDI.TheboxonglobalassumptionswaswrittenbyJohnBeirne,GabrieleCiminelli,JaquesonGalimberti,PilipinasQuising,andDennisSorinoofERDI,andEmmanuelAlano,ERDIconsultant.TheboxonchangesintheAsianDevelopmentOutlookcompositionandeconomygroupingswaswrittenbyJulesHugotandPriscilleVillanuevaofERDI.

2ASIANDEVELOPMENTOUTLOOKDECEMBER2025

EconomicgrowthindevelopingAsiaremainsresilient,

underpinnedbysolidconsumptionandcontinuedexport

strength.ExceptforIndia,wheregrowthsurprisedontheupside,thirdquarter(Q3)developmentsintheregionwereinlinewith

projectionsinAsianDevelopmentOutlook(ADO)September

2025.Resilientconsumptionsupporteddomesticdemandeven

asinvestmentweakened,weigheddownbyinventorydestocking

andpersistent,albeitmoderating,tradeuncertainty.Exports

remainedrobust,bolsteredbystrongdemandforelectronicsand

semiconductorsandexportmarketdiversification,whichhelpedtomitigatetheimpactofhigherUnitedStates(US)tariffs.Inflationintheregioncontinuedtoease,primarilyasfoodpricesfell.Reflectingthesedevelopments,growthforecastsfordevelopingAsiaareraisedby0.3percentagepointsto5.1%for2025andby0.1percentage

pointsto4.6%for2026.Whileregionalgrowthisexpectedto

moderatenextyear,exportstrength,underpinnedbytheupturnintheAIandelectronicscycle,willhelptosustaineconomicactivity,alongsidelowertradeuncertaintyafterseveralgovernments

concludedtradeagreementswiththeUS.Possiblere-escalationsoftariffsandtradepolicyuncertainty,andintensificationoffinancialmarketvolatility,remainsignificantdownsiderisksfortheoutlook.Geopoliticalstrains,localizedtensions,andadeeper-than-expectedpropertymarketdeteriorationinthePeople’sRepublicofChina

(PRC)couldalsoweighontheregion’sprospects.

RecentDevelopments

GrowthindevelopingAsiastabilizedat5.4%inQ32025,

unchangedfromthefirsthalf(H1),asaslowdowninthe

PRCwasoffsetbyaccelerationinIndia.Externalheadwinds

shapedeconomicactivityandeconomy-specificdriversledto

somedivergence(Figure1).InthePRC,growthdecelerated

lessthananticipatedinADOSeptember2025,to4.8%from

5.3%inH1.Weakdomesticdemand,ongoingpropertymarket

strains,andscalingbackoftrade-inincentivesinsomeprovinces,weighedongrowth.Incontrast,exportsprovedstrongerthan

expected,supportedbyexportmarketdiversification.GrowthinIndiaexceededexpectationsasgrossdomesticproduct(GDP)expandedby8.2%inthesecondquarterofthecurrentfiscal

year(JulytoSeptember2025),thefastestgrowthin6quarters,drivenbystrongprivateconsumptionanddespitemuted

governmentconsumption.ExcludingthePRCandIndia,averagegrowthintherestoftheregionpickedupslightly,buttrends

variedacrosseconomies.Bolsteredbystrongglobaldemandforelectronicsandsemiconductors,mosthigh-incometechnologyexportersandAssociationofSoutheastAsianNations(ASEAN)economiesgrewrobustly.Taipei,China’sAI-relatedexports

helpedmaintainitsgrowthatastrong7.6%,whilegainswerealsosolidinIndonesiaandMalaysia.However,investmentweakness

Figure1ContributionstoGDPGrowth,H12025andQ32025

GrowthremainedsteadyindevelopingAsiainQ3,asquickerexpansionsinIndiaandtherestoftheregionofsetthemoderationinthePRC.

TotalconsumptionTotalinvestment

Netexports

StatisticaldiscrepancyGDPgrowth,%

Percentagepoints,yoy12

8

8.27.6

5.45.4

5.3

4.6

4.8

4.2

4.1

3.94.1

4

2.9

0

–4

H12025Q32025

DevelopingAsia

H12025Q32025

India

H12025Q32025

DevelopingAsia

(excl.PRCandIndia)

H12025Q32025

HITE

H12025Q32025

ASEAN-4

H12025Q32025

People’sRepublicofChina

ASEAN=AssociationofSoutheastAsianNations;ASEAN-4=Indonesia,Malaysia,Philippines,andThailand;PRC=People’sRepublicofChina;GDP=grossdomesticproduct;H=half;HITE=high-incometechnologyexporters(HongKong,China;RepublicofKorea;Singapore;andTaipei,China);Q=quarter,yoy=yearonyear.

Notes:EconomiesincludedarethosewithavailablequarterlyGDPfigureswithdemand-sidebreakdowns,whichaccountforabout90%ofdevelopingAsia’sGDP.Componentsdonotadduptothetotalduetostatisticaldiscrepancyandchain-linkingmethod.Alldataareincalendaryearsandnon-seasonallyadjustedterms.

Source:HaverAnalytics.

ASIANDEVELOPMENTOUTLOOKDECEMBER20253

partlyoffsetexternaltailwindsinseveraleconomies.Meanwhile,GDPgrowthslowedinSingapore,ashigherimportsoffset

exportgains,andinThailand,whereconsumptioneasedamid

reducedspendingonservices.GDPgrowthslowedto4.0%inthePhilippines—thelowestratesinceQ12021—asstricterfiscalandbudget-executioncontrolsandadverseweathercurbedpublic

investmentandhouseholdspending.

InvestmentgrowthslowedmarkedlyinQ3compared

toH12025.Thedecelerationininvestmentwasbroad-

based.InthePRC,fixedassetinvestmentcontractedby8%

inQ3(Figure2).Thisreflectedcontinuedweaknessinthe

propertymarket,butalsoslowinggrowthinmanufacturingandinfrastructureinvestment,asbusinessconfidenceremained

muted.Followingstronggainsearlierintheyear,investment

growthweakenedsharplyinQ3inseveralhigh-income

technologyexportersandASEANeconomies(Figure3).The

downturnwaslargelydrivenbyinventorydrawdowns,which

inseveraleconomiesswungfrommakingpositivetostrongly

negativecontributions.Privateinvestmentmomentumalso

deceleratedinsomeeconomies.Thesedynamicsareconsistentwithacyclicalcorrection,likelylinkedtoweakeningexternal

demandasexportfrontloadingeffectsfade.Incontrast,privateinvestmentwashigherinHongKong,China;Singapore;and

Thailand,bolsteredbyrisingconstructionworksandincreased

investmentinequipmentandintellectualpropertyproducts.

Inaddition,growthinfixedcapitalinvestmentweakenedonlymodestlyinIndiaandremainedresilientinIndonesiaonrobustbuildingandmachineryandequipmentoutlays.

Figure2FixedAssetInvestmentinthePRC

FixedassetinvestmentfellinQ3,withcontractionsinmanufacturingandinfrastructurecompoundingtheprolongedslumpinrealestateinvestment.

AllfixedassetsInfrastructure--eManufacturingRealestate

%,yoy

16

8

0

–8

–16

–24

Q1Q3Q1Q3Q1Q3Q1Q3

2022202320242025

PRC=People’sRepublicofChina,Q=quarter,yoy=yearonyear.

Source:CEICDataCompany.

Figure3ContributionstoInvestmentGrowth,H12025andQ32025

Inventorydrawdownsconsistentwithweakeningdemanddrovethedownturn.

Grossfixedcapitalformation

PrivategrossfixedcapitalformationPublicgrossfixedcapitalformation

ChangeinstocksandvaluablesTotalinvestment

Percentagepoints,yoy

20

15

10

5

0

–5

–10

–15

13.910.3

7.68.1

6.5

4.3●

5.2

5.1

2.7

1.9

1.5

0.16

3.4

●

–0.5

–5.9

Q3

2025

H1

2025

IND

●

–2.4–1.9–2.8

H1Q3

H1Q3

H1Q3

H1Q3

H1Q3

H1Q3

H1Q3

H1Q3

20252025

20252025

20252025

20252025

20252025

20252025

20252025

20252025

HKG

ROK

SIN

TAP

INO

MAL

PHI

THA

High-incometechnologyexporters

ASEAN-4

HKG=HongKong,China;IND=India;INO=Indonesia;ROK=RepublicofKorea;MAL=Malaysia;PHI=Philippines;SIN=Singapore;TAP=Taipei,China;THA=Thailand.ASEAN=AssociationofSoutheastAsianNations;ASEAN-4=Indonesia,Malaysia,Philippines,andThailand;GDP=grossdomesticproduct;H=half;Q=quarter;

yoy=yearonyear.

Note:EconomiesincludedarethosewithavailablequarterlyGDPfigureswithdemand-sidebreakdowns,whichaccountforabout50%ofdevelopingAsia’sGDP.Alldataareincalendaryearsandnon-seasonallyadjustedterms.

Sources:AsianDevelopmentBankcalculationsusingdatafromHaverAnalytics;nationalsources.

4ASIANDEVELOPMENTOUTLOOKDECEMBER2025

Leadingindicatorsareconsistentwithdivergingpatterns

ofeconomicactivityacrossdevelopingAsia.S&PGlobal

manufacturingpurchasingmanagers’indexes(PMIs)suggest

economicactivitywasbroadlyresilientinNovember.Values

above50signaledimprovingconditionsin6outof10economieswithavailabledatawhile,comparedtothepreviousmonth,PMIsincreasedinhalfoftheeconomiesandedgedlowerintherest

(Figure4).Althoughstillfirmlyabove50,themanufacturingPMIdeclinedtoa9-monthlowinIndiaasUStariffsdentedexport

ordersandproductionactivity.Meanwhile,thePhilippines’PMIdroppedtoitslowestlevelinmorethan4years,amiddecliningmanufacturingoutputandneworders,partlyreflectingtyphoon-relateddisruptions.Readingsedgedupandwereconsistent

withimprovingmanufacturingactivityinIndonesia,Malaysia,

andThailand.Incontrast,thePMIswungbackbelow50inthe

PRCasgrowthinneworderseasedtoanear-neutrallevel,whileitremainedincontractionaryterritoryintheRepublicofKorea

andTaipei,China.Notably,Taipei,China’sPMIsuggeststhat

manufacturingactivityremainsbroadlyweak,insharpcontrasttoitshigh-techsectorwhichcontinuestoexpandapace:exportordersforelectronicsandinformationandcommunications

technologyproductssurgedbyabout32%inOctober.In

services,India’sservicesPMIstrengthenedinNovemberonthebackofstrongerdemand,recentgoodsandservicestax(GST)

reliefmeasures,andeasinginflationarypressures.October

readingsforthePhilippinesandSriLankaalsopointtocontinuedimprovementinwholesaleandretailtrade-relatedactivities.

InthePRC,however,servicesactivityweakenedmarginallyinNovembertoitssoftestpacein5monthsasnewbusinessesgrowthslowedandjobsheddingcontinued.

InflationedgedupinthePRCbutcontinuedtodecline

onaverageintherestofdevelopingAsia.Afterfallinginto

negativeterritoryinAugustandSeptember,headlineinflation

inthePRCincreasedto0.2%inOctober(Figure5).Risingcore

goodspricesreduceddeflationarypressuresintheregion’slargesteconomy,evenasfoodpricescontinuedtofallfortheninth

consecutivemonth.ExcludingthePRC,averageregionalinflationdeceleratedto1.6%.ThiswasmainlydrivenbysharplyfallingpricepressuresinIndia,whereinflationcameinat0.3%inOctober.ThisdeclinewasduetoGSTreductionsandfoodpricedeflationfor

asecondsuccessivemonth,supportedbyfavorableagriculturaloutputandbenignweatherconditions.Takentogether,thesedynamicslifteddevelopingAsia’sheadlineinflationto0.9%yearonyearinOctoberandyear-to-dateinflationto1.1%,evenascoreinflationremainedbroadlyunchanged.

UStradepolicyuncertaintydecreasedaftertariffsonthe

PRCwerereducedandbilateraltradedealsclarified,butitremainselevated(Figure6).TradetensionsbetweentheUS

andthePRCdeclinedsomewhatinNovember.TheUSlowered“fentanyl-related”tariffsonPRCimportsfrom20%to10%,

whilethePRCsuspendedexportrestrictionsonrareearthand

criticalminerals.TheUSalsofinalizedthetradedealwiththe

RepublicofKoreaandannouncedadditionaltariffexemptions

forfoodproducts.Provisionsforadditionaltariffexemptions

werealsoincludedintradedealsbetweentheUSandseveral

ASEANeconomies(Box1).Meanwhile,newUStariffswere

introducedinOctoberonsoftwoodandwoodenfurniture

imports,andontrucksandbusesinNovember.Theseadditionalmeasures,however,willhaveminimalimpactontheregiongiven

Figure4S&PPurchasingManagers’IndexinSelectedDevelopingAsianEconomies

ManufacturingperformanceinNovemberwasmixed,withminorgainsanddipsinsomeeconomiessuggestingunevenyetresilientgrowth;servicesactivityremainedrobust.JulyAugustSeptemberOctoberNovemberThreshold

Index

80

A.ManufacturingPMIB.ServicesPMI

70

60

59.5

56.6

56.8

52.1

53.853.3

50.250.1

50

49.949.448.847.4

40

Thailand

RepublicofKorea

Malaysia

Taipei,ChinaPhilippines

India

PRCSriLanka,Philippines,

nsansa

PRC

IndiaVietNamIndonesiaSingapore,nsa

PRC=People’sRepublicofChina;nsa=notseasonallyadjusted;PMI=purchasingmanagers’index.

Notes:Valuesbelow50indicatedeterioration,andabove50,improvement.Allseriesareseasonallyadjusted,unlessotherwiseindicated.

Sources:CEICDataCompany;SingaporeInstituteofPurchasingandMaterialsManagement.

ASIANDEVELOPMENTOUTLOOKDECEMBER20255

Figure5HeadlineInflation:PRCandDevelopingAsiaexcludingPRC

InflationedgedupinthePRCbut,onaverage,continuedtomoderateintherestoftheregion.

People’sRepublicofChina

DevelopingAsiaexcludingPRC

%,yearonyear10

8

6

4

2

0

–2

Average(2015–19)=3.2

1.6

0.2

Average(2015–19)=2.0

JulJan

2025

JulJan

2024

JulOct

Jan

JulJan

2023

2022

PRC=People’sRepublicofChina.

Notes:Coreinflationexcludesvolatileenergyandfoodprices.Theregionalaverageiscalculatedusinggrossdomesticproductpurchasingpowerparitysharesas

weightsandincludesdatafor22economiesaccountingfor94%oftheregion’sgrossdomesticproduct.DataareasofOctober2025.

Sources:AsianDevelopmentBankestimatesusingdatafromHaverAnalytics;CEICDataCompany;officialsources.

Figure6TradePolicyUncertaintyIndex,MonthlyAverage

TradepolicyuncertaintydeclinedfollowingUStarifandtradedealannouncementsinOctoberandNovember.

Index

1,200

TPUfurther

decreasedin

November2025

900

600

300

0

Nov

Jan

2018

Jan

2016

Jan

2020

Jan

2025

Jan

Jan

2022

2024

TPU=tradepolicyuncertainty.

Note:ThemeasurereflectsthefrequencyofarticlesdiscussingtradepolicyuncertaintyinsixnewspapersfromtheUnitedStatesandonefromthe

UnitedKingdom.

Source:D.Caldaraetal.2020.

TheEconomicEffectsofTradePolicyUncertainty

.JournalofMonetaryEconomics.109.pp.38–59(accessed2December2025).

limitedexportsoftheseitems.Uncertaintyremainsonothersector-specifictariffsforbrandeddrugsandsemiconductors,announcedinAugustandSeptember,asthesemeasureshavenotbeenformallyintroduced.

Regionalexportscontinuedtoriseinthesecondhalfoftheyear,underpinnedbyrobustelectronicsdemand.BetweenJanuaryandSeptember,electronicsexportsincreasedby25%indevelopingAsiaexcludingthePRC(Figure7,panelA),

Figure7ChangesinExports(USD)bySectorinJan–Sep2025

MachinerydrovethePRC’sexportresilience,whileelectronicsboostedexportsintherestoftheregion.

A.DevelopingAsiaexcludingthePeople’sRepublicofChina

%,yearonyear

30

20

10

0

–10

OtherAutomobilesOtherMachineryElectronics

B.People’sRepublicofChina

%,yearonyear

30

20

10

0

–10

Automobiles

OtherMachinery

Electronics

Other

PRC=People’sRepublicofChina.

Note:Otherincludeschemicals,food,fuel,metals,andtextiles.

Sources:CEICDataCompany;InternationalTradeCenter.

TradeMap

(accessed28November2025).

withsteadygainsthroughtheyear.Exportsfromhigh-income

technologyexportersincreasedby22%yearonyearinOctober,ledbya49%surgeinTaipei,Chinaamidstrongglobaldemandforsemiconductorchips(Figure8).ThePRC’sexportsweredown

1%inOctober,partlybecauseofbaseeffectsandweigheddownbytherenminbi’srecenttrade-weightedappreciation.Overall,

however,thePRC’sexportsincreasedby5%inthefirst10monthsoftheyear.ThisrelativeresilienceofthePRC’sexportsreflects

gainsinmachineryexportsandelectronics(Figure7,panelB),andthereallocationofitsexportsfromtheUStoothermarkets,particularlywithinAsia(Figure9).Exportsfromtherestoftheregioncontinuedrisingsteadily,ledbySoutheastAsia’sexportstotheUSaswellasothermarkets.India’sexportswerealso

resilient—notablyrisingtotheUSuptoJuly,drivenbytariff-exemptsectorssuchassmartphonesandpharmaceuticalsandfrontloadinginothersectors.

Financialmarketconditionsremainbroadlystable,

supportedbyafirmerglobaltradeenvironment.Regionalequitymarketsgainedbetween1Octoberand30November,despitebriefpullbacks.Valuationsdippedmodestlyaround

14OctoberamidrenewedUS–PRCtradetensionsandagain

6ASIANDEVELOPMENTOUTLOOKDECEMBER2025

Figure8MonthlyExportsofDevelopingAsianEconomies

Exportsrosefurtherinthesecondhalfoftheyear,drivenbyhigh-incometechnologyexportersanddespiteaslowdowninthePRC.

High-incometechnologyexportersPRC

RestofdevelopingAsia DevelopingAsia

$,2023=100

130

120

110

100

JulOct

Jan

2024

JulJan

2025

PRC=People’sRepublicofChina.

Notes:High-incometechnologyexportersincludeHongKong,China;RepublicofKorea;Singapore;andTaipei,China;DevelopingAsiaincludeshigh-incometechnologyexporters,PRC,India,Indonesia,Malaysia,Pakistan,Philippines,

Thailand,andVietNam.

Source:CEICDataCompany(accessed27November2025).

inNovemberasconcernsoverAIstockvaluationsresurfaced.

Marketsrecoveredonthebackofnewtradedealsbetween

regionaleconomiesandtheUS,anextendedUS–PRCtrade

truce,andexpectationsoffurtherratecutsbytheUSFederal

Reserve(Fed).Investorsentimentwasfurtherbuoyedbya

morepositiveeconomicoutlook,asQ3GDPgrowthexceeded

forecastsinseveralregionaleconomies.Riskpremiumswidenedonlymodestly,while10-yearsovereignbondyieldsdeclinedin

5outof10economieswithavailabledata.Inadeviationfrom

pattern,theregionrecordednetportfoliooutflowsintheperiod,asinflowsinOctoberwereoutweighedbylargeoutflowsin

November.ThisreversalwasdrivenbyrenewedfearsoverAI

stockovervaluationsandamorestableUSdollar,aspersistent

USinflationheighteneduncertaintyovertheFed’sdovishstance.

Withpricepressuressubdued,monetaryeasingpersistedacrossdevelopingAsia.InSeptemberandOctober,inflationrateswereatorbelowtargetfor13outof17inflation-targetingeconomies.Inresponsetomutedinflationdynamics,central

banksinHongKong,China;Indonesia;thePhilippines;and

Tajikistancutpolicyrates.Incontrast,monetaryauthoritiesinKazakhstanandtheKyrgyzRepublictightenedpolicyfurther

Figure9ChangesinExportstotheUSandtheRestoftheWorld,May–July(%,yearonyear)

Exportgrowthwasbroad-based,withTaipei,China’sandSoutheastAsia’sUSexportsrisingdespitehighertarifs.

EastAsiaSouthAsia

SoutheastAsia

Exportstotherestoftheworld

PapuaNewGuinea

●

30

Uzbekistan

●

Taipei,China

HongKong,China

●

Philippines

15

Singapore

PRC

VietNam

ThailandCambodia

Kazakhstan

●

Bangladesh

ROK

●

●

Pakistan

Georgia

SriLanka

●

0

IndonesiaMalaysia

●

India

●

Myanmar

●

Fiji

Armenia

●

–15

Mongolia

●

BruneiDarussalam

●

●

Azerbaijan

–30

–100–60–202060100ExportstotheUS

PRC=People’sRepublicofChina,ROK=RepublicofKorea,US=UnitedStates.

Note:CirclesareproportionaltothevalueofexportstotheUS,unlesstheyarelowerthan$3.6billion.

Sources:InternationalMonetaryFund.

InternationalMerchandiseTradeStatistics

andCEICDataCompany.

ASIANDEVELOPMENTOUTLOOKDECEMBER20257

tocounterpersistentinflationarypressures.Lookingahead,

looserUSmonetarypolicymayprovideroomforfurthereasingintheregion.TheFedlowereditsbenchmarkfederalfunds

rateby25basispointsinSeptemberandagainon29October,

bringingthetargetrangeto3.75%–4.00%.Marketexpectations

areconsistentwithadditionalFedpolicyeasinginto2026,but

substantialuncertaintyremainsoveritsspeedandterminalpoint.Thisuncertaintymaybereflectedinamorecautiouseasing

stanceindevelopingAsia,asregionalcentralbanks’balance

effortstosupportgrowthagainsttherisksofaninflationrevivalandfinancialinstability.

AggregategrowthprojectionsformajoradvancedeconomiesremainunchangedfromSeptember(Box2).USgrowth

forecastsaremaintainedat1.7%in2025and1.8%in2026,as

elevatedinflationandpolicyuncertaintycontinuetoweighon

domesticdemand.Thegovernmentshutdown,whichran43daysfrom1Octoberto13November2025,wasthelongestinhistoryanddelayeddatareleases,complicatingpolicymakingand

amplifyingUSpolicyuncertainty.Withinflationremainingabovetarget,theFedisexpectedtoeaselessthanmarketsanticipate,supportingtheUSdollar,andweakeningexportcompetitiveness.Meanwhile,surginginvestmentinAI-relatedinfrastructurewill

partlyoffsetsubdueddemand.Theeuroareagrowthforecast

remainsunchangedat1.2%forboth2025and2026,supportedbyrisingrealwagesandlowunemployment.In2026,lowinterestratesandexpansionaryfiscalpoliciesareexpectedtosupport

economicactivity.Japan’sgrowthoutlookremainsat1.1%for

2025and0.6%for2026.Expansionaryfiscalpoliciesunderthenewgovernmentareexpectedtosupportnear-termgrowth,

thoughexternalconditionsremainchallenging.Therecentyendepreciation,whichcouldraiseimportedcostpressures,and

slower-than-expectedmonetarypolicytightening,promptedanupwardrevisiontothe2025inflationforecast.

DevelopingAsia’sgrowthoutlookisrevisedto5.1%for2025and4.6%for2026,upby0.3and0.1percentagepoints,

respectively,fromSeptember(Table1).InthePRC,the

2025growthforecastisraisedonresilientexportstonon-USmarketsandcontinuedfiscalstimulus.Followingstronger-

than-anticipatedgrowthinQ3,India’s2025growthprojectionisupgradedby0.7percentagepointsto7.2%,drivenprimarilybyrobustdomesticconsumptionsupportedbyrecenttax

cuts.Similarly,growthprojectionsforhigh-incometechnology

exporters,aswellasSoutheastAsianeconomiessuchas

Indonesia,Malaysia,andVietNam,arerevisedupwarddueto

better-than-expectedperformanceinQ3,mostlydrivenbyrobustexportactivity.ForKazakhstan,the2025projectionisraisedduetothepostponementofthisyear’splannedoilproductioncuts

to2026.For2026,theupwardrevisiontotheregion’sgrowth

proje