East and South Asia continue to demonstrate robust economic growth, standing out as critical contributors to global stability despite a subdued global growth projection of 2.8% for 2025, according to the United Nations’ World Economic Situation and Prospects (WESP) 2025 report.
The report released today highlights the resilience of the global economy, which has withstood multiple shocks, though growth remains below the pre-pandemic average of 3.2%. Persistent challenges like weak investment, sluggish productivity, and high debt levels weigh on the global outlook. However, East and South Asia have emerged as bright spots, driven by strong private consumption, exports, and targeted fiscal and monetary policies.
The report mentions that economic prospects in East Asia remain stable, with the region expected to grow at 4.7% in 2025 and 4.5% in 2026. Low inflation and robust wage growth continue to fuel private consumption, while merchandise trade remains a key contributor. Inflation in the region is expected to stay muted at 1.4% in 2025.Â
Despite a moderate slowdown, the report reads that China’s economy remains a key driver, with growth projected at 4.8% in 2025. The country faces challenges such as tepid household consumption and a weak property sector, but the report notes that the government is responding with fiscal and monetary measures to stabilize the economy.
In South Asia, the report says India’s economy is projected to grow by 6.6% in 2025, supported by private consumption, investment, and strong export growth in services and manufacturing. The report further mentions that the overall growth for South Asia is anticipated to be 5.7% in 2025, with countries like Bhutan, Nepal, Pakistan, and Sri Lanka also recovering. However, South Asia is not without risks, including decelerating external demand, high debt levels, and social unrest.
Despite these challenges, both regions are showing resilience, aided by government policies such as fiscal reforms and monetary easing. The report warns, however, that East and South Asia face growing risks from geopolitical tensions, trade disputes, and the impacts of climate change, which could exacerbate food insecurity and economic instability. The report also highlights the increasing demand for critical minerals, presenting a significant opportunity for many countries in the regions to foster growth and boost public revenues, although it carries risks related to poor governance, unsafe labor practices, and environmental degradation.