Emerging Asia Accounts for 60% of Global Economic Growth

Last week, the OECD slashed its forecast for global GDP growth in 2025 from 3.3 percent to just 2.9 percent, primarily reflecting the adverse effects of the new high-tariff trade policy implemented by the Trump administration. The projected slowdown is expected to be most noticeable in the United States and its most important trade partners, whereas other economies, especially in Asia, are expected to show robust growth despite the new trade barriers.

While China, one of the largest exporters to the U.S., saw its growth outlook for 2025 unchanged from the December 2024 prediction of 4.7 percent, thanks in part to fiscal stimulus spending offsetting some of the damage inflicted by the bilateral tariffs, the OECD cut its GDP growth forecast for Mexico and Canada, both closely linked to the U.S. economy, by 66 and 50 percent, respectively, for 2025. The U.S. economy itself is now expected to grow a modest 1.6 percent this year, down from a December 2024 prediction of 2.4 percent.

As our chart shows, emerging Asia, which comprises of China, India and Indonesia as well as Hong Kong, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam, continues to be the world’s economic growth engine, with its role even more pronounced in a high-tariff environment than it has been in previous years. According to OECD estimates, emerging Asia is expected to account for 60 percent of global economic growth this year, up from 57 and 56 percent in 2023 and 2024, respectively. The increase mostly comes at the expense of North America, which is projected to see its contribution to global economic growth fall from 13 percent in the past two years to just 8 percent in 2025 and 2026.