The World Bank has released its 2025 Regional Economic Update, highlighting that the East Asia and Pacific (EAP) region experienced significant economic growth in 2024 compared to other regions. However, this growth is projected to moderate, slowing down to 4.0 percent in 2025 from 5.0 percent in 2024. This change is attributed to global uncertainties and region-specific challenges such as climate change and demographic shifts.
The update estimates that about 24 million people in the EAP region will overcome poverty between 2024 and 2025. This is measured according to the upper-middle-income poverty line. Yet, growing global uncertainty may affect business and consumer confidence, limiting investment and consumption. Trade restrictions could impact exports, and slower global growth might further reduce external demand.
According to Manuela V. Ferro, Vice President of the World Bank for East Asia and Pacific, "While navigating global uncertainty, countries across EAP have the opportunity to strengthen their economic prospects by embracing and investing in new technologies, opening up business opportunities through bolder reforms, and deepening international cooperation."
The economic growth forecast for various EAP countries in 2025 includes China and 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 to be 2.5 percent.
The World Bank recommends a three-pronged approach to sustaining growth: adopting new technologies to increase productivity, implementing reforms to boost competition, and enhancing international cooperation. Aaditya Mattoo, World Bank East Asia and Pacific Chief Economist, stated, “Combining new technologies with bold reform and innovative cooperation could help countries in the region cope with current environment and longer-term challenges. That is the recipe for higher productivity and better jobs.”
Poverty rates in the region continue to decline, with the World Bank tracking poverty at $6.85 a day for upper-middle-income countries.
For more details, the full EAP Economic Update Report is available on the World Bank's website.