Macroeconomic overview
Sections: GDP Growth Inflation
GDP Growth
The APAC region’s near-term outlook has weakened amid rising trade tensions, with growth projected to slow to 3.9% in 2025 from 4.6% in 2024, according to the IMF April 2025 update. This 0.7 percentage point downgrade, reflects weaker global demand, limited consumer spending, and heightened uncertainty due to US tariff announcements and countermeasures by trading partners. Despite robust growth in 2024 driven by resilient domestic consumption and export dynamics, risks are tilted to the downside due to the region’s vulnerability to an uncertain trade environment and potential asset price volatility. In the GCC countries, non-oil sector expansion and diversification efforts continue to support economic resilience.¹
Australia
In 2024, Australia's real GDP growth was estimated at 1.0%, reflecting subdued private demand and a reliance on public sector spending. The IMF projects that GDP growth will pick up to 1.6% in 2025, driven by real income growth from rising wages and tax cuts, which are expected to boost private consumption. Public demand is also expected to remain strong. However, growth is expected to remain below potential until 2026.²
India
India’s real GDP growth reached 6.5% in 2024, driven by strong domestic demand and sustained public and private investments. The IMF highlights that India’s growth was supported by infrastructure spending, resilient services activity, and robust private consumption amid stable macroeconomic conditions. For 2025, growth is forecasted at 6.2%, reflecting a slight moderation as the output gap narrows and the economy returns to its potential growth path, alongside continued government focus on capital expenditure and a strong services sector.³
Japan
Japan’s real GDP growth was minimal at 0.1% in 2024 due to weak service exports, auto sector challenges, and external trade pressures, though semiconductor exports and a modest recovery in domestic consumption offered support. For 2025, growth is forecasted at 0.6%, driven by above-inflation wage growth boosting household disposable income, strengthening private consumption, and robust private investment supported by high corporate profits and accommodative financial conditions. The Bank of Japan is expected to maintain a supportive monetary stance amid these developments.⁴ ⁵ ⁶
Malaysia
Malaysia’s real GDP growth reached 5.1% in 2024, driven by strong domestic demand, increased investment, and a rebound in exports of electrical and electronic products, as well as a recovery in tourism. The Ministry of Finance highlighted that this performance was underpinned by increased investment in physical assets like buildings, equipment, and infrastructure, along with strong construction activity, particularly in public infrastructure projects. For 2025, growth is forecasted at 4.1%, sustained by domestic demand and investment momentum, though global uncertainties may weigh on exports.⁷ ⁸
Singapore
Singapore's real GDP growth reached 4.4% in 2024, driven by a recovery in electronics particularly semiconductor exports, and a revival in the manufacturing sector. The IMF notes that the recovery in exports, fuelled by higher global demand for electronics, played a key role. The services sector, particularly financial services, also contributed positively. For 2025, Singapore's growth is expected to moderate to 2.0%, largely due to global trade uncertainties and weaker-than-expected growth in the manufacturing sector during Q1, which is anticipated to persist throughout the year. The slowdown in manufacturing may also spill over into the services sector. Additionally, the impact of higher tariffs on exports, along with ongoing supply chain disruptions, are likely to dampen growth. However, accommodative fiscal and monetary policies are expected to partially offset these challenges. The IMF also highlights that geopolitical tensions and slower global growth present key risks to Singapore's export-driven economy.⁹ ¹⁰ ¹¹
South Korea
South Korea's real GDP growth reached 2.0% in 2024, propelled by a strong rebound in semiconductor exports, which significantly improved the current account surplus. However, domestic demand remained subdued due to inflation-related real income erosion and elevated private sector debt. For 2025, growth is forecasted at 1.0%, as export growth is expected to moderate and domestic demand gradually strengthens. The IMF notes that the downside revision in the 2025 growth forecast is driven by weaker external demand, ongoing challenges in the semiconductor sector, and continued pressure from elevated household debt and inflation, which will dampen domestic consumption.¹²
Taiwan
Taiwan's real GDP growth reached 4.3% in 2024, marking its strongest performance in three years, driven by surging global demand for AI-related semiconductors and robust tech exports. For 2025, growth is forecasted at 2.9%, as continued strength in tech exports is expected to be partly offset by rising global trade tensions, particularly the proposed US tariffs on semiconductors and domestic fiscal consolidation efforts aimed at tightening government spending.¹³ ¹⁴ ¹⁵
KSA
In 2024, the KSA's real GDP grew by 1.3%, driven by a 4.3% expansion in the non-oil sector and increased government activity, despite a 4.5% decline in oil-related activities. The IMF projects 3.0% growth for 2025, supported by continued diversification under Vision 2030 and public investments, though extended oil production cuts and lower oil prices may temper overall momentum.¹⁶ ¹⁷
UAE
The UAE's real GDP grew by 3.8% in 2024, propelled by expansion in non-oil sectors such as tourism, construction, transportation, real estate and financial services, underscoring the country's successful economic diversification efforts. According to the IMF, growth is projected at 4.0% in 2025, supported by continued public investments, a gradual recovery in oil production, and ongoing structural reforms aimed at enhancing competitiveness and sustainability as well as strong fiscal buffers that provide space for continued policy support.¹⁸
Inflation
Inflation in the APAC region has largely returned to target levels in 2024, according to the IMF. This moderation is attributed to factors such as declining global commodity prices and easing supply chain constraints. However, the IMF cautions that rising trade tensions, particularly due to new US tariffs and potential retaliatory measures, pose risks to this outlook. These developments could lead to increased goods prices, especially impacting low-income households.
In the GCC countries, inflation remains low and stable, supported by government subsidies and effective fiscal policies.¹⁹
Australia
Australia’s inflation rate moderated to 3.2% in 2024, down from 5.6% in 2023, driven by easing energy and goods prices, improved supply chain conditions, and a slowdown in services inflation. Core inflation (trimmed mean) fell to a three-year low of 2.9% in early 2025, reflecting broader disinflationary trends. However, housing and education costs continue to exert upward pressure. Looking ahead, inflation is forecasted to ease further to 2.5% in 2025, though the withdrawal of government cost-of-living relief could introduce some volatility. ²⁰ ²¹
India
India's inflation rate decreased from 5.4% in 2023 to 4.7% in 2024, with a further decline to 4.2% projected for 2025, according to the IMF. This moderation is attributed to a combination of factors, including easing food prices due to improved agricultural output, the Reserve Bank of India’s prudent monetary policies, and a reduction in global commodity prices, particularly oil. These factors have helped stabilise inflationary pressures and are expected to support continued easing in the coming years.²²
Japan
Japan's inflation rate eased to 2.7% in 2024, down from 3.3% in 2023, driven by easing energy prices, improved supply chain conditions, and stronger wage growth due to a tight labour market. Additionally, the shift from cost-push to demand-driven inflation, as labour shortages intensified and the output gap closed, contributed to moderating price pressures. The Bank of Japan (BOJ) noted that easing global commodity prices and a more stable domestic economic environment played key roles in this moderation. For 2025, inflation is forecasted at 2.4%, as the effects of currency strength continue to temper price pressures.²³ ²⁴
Malaysia
Malaysia’s inflation eased to 1.8% in 2024, supported by stable supply chains, government price controls, a stronger Ringgit, and lower global commodity prices.
In 2025, inflation is forecast to rise to 2.4%, driven by removal of petrol subsidies for the top 15% income earners, expansion of Sales and Services Taxes on non-essential goods and services, and increase in public sector wages.²⁵ ²⁶
Singapore
Singapore's inflation rate decreased to 2.4% in 2024, down from 4.8% in 2023, attributed to improved global supply chains and moderated costs in transportation and housing. The Monetary Authority of Singapore reported that core inflation averaged 2.7% in 2024, easing from 4.2% in 2023. For 2025, inflation is forecasted at 1.3%, reflecting stable domestic conditions and continued moderation in imported inflation.²⁸
South Korea
South Korea's inflation rate averaged 2.3% in 2024, down from 3.6% in 2023, primarily due to easing global oil prices, improved supply chain conditions, and the Bank of Korea's restrictive monetary policy stance. For 2025, inflation is projected to be 1.8% close to the Bank of Korea’s 2.0% target as economic activity aligns more closely with potential output.²⁹
Taiwan
Taiwan’s inflation eased to 2.2% in 2024 from 2.5% in 2023, due to government measures including freezing electricity prices and subsidized fuel costs. Still, typhoon-related crop damage caused temporary food price spikes.
Inflation is projected to fall to 1.8% in 2025, driven by weaker domestic demand, lower business costs, and the disinflationary impact of global tariffs. Taiwan's central bank is likely to hold rates steady into early 2025 amid concerns over lingering inflation and US tariffs.³⁰ ³¹
KSA
In 2024, the KSA's inflation rate stood at 1.7%, primarily driven by a significant increase in housing rents, which surged by 10.6% year-on-year. This uptick in rental costs significantly influenced the overall inflation figures. Despite government subsidies stabilising other sectors, housing rents have remained a persistent driver of inflation. For 2025, inflation is projected at 2.0%, reflecting ongoing pressures in the housing market.³²
UAE
The UAE's inflation rate held firm at 1.7% in 2024, well below the global average of 5.7%, largely owing to subdued price pressures in tradable goods. According to the Central Bank of the UAE, inflation is projected to rise modestly to 2.1% in 2025, driven primarily by increases in non-tradable items such as housing and services.³³
Sources
- IMF Regional Economic Outlook for Asia and Pacific April 2025
- IMF Press Release No. 24/482 - IMF Executive Board Concludes 2024 Article IV Consultation with Australia, December 23, 2024
- IMF - India: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for India, February 27, 2025
- Japan's service sector activity rebounds in April, PMI shows, Market Screener, Published on June 05, 2025
- BOJ to keep rates steady, cut growth forecasts, The Economic Times, Reuters, Last Updated: May 01, 2025
- IMF - Japan: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Japan, April 02, 2025
- IMF Executive Board Concludes 2025 Article IV Consultation with Malaysia, March 03, 2025
- 5.1 Pct GDP Growth In 2024 Reflects MADANI Govt's Determination To Boost Economy, Ministry of Finance, Malaysia, Press Citations February 14, 2025
- Singapore: Lowering our GDP forecast for 2025, ING Think, April 30, 2025
- Singapore downgrades 2025 GDP forecast to 0%-2% as US-China tariff war weighs on global growth, British Chamber of Commerce, Singapore, April 15, 2025
- Singapore's economy grew 4.4% in 2024, beating forecasts and advance estimates, Channel news Asia, February 14, 2025
- IMF - Republic of Korea: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Korea, February 07, 2025
- Taiwan unexpectedly raises 2025 full-year GDP forecast on strong tech demand, The Economic Times, Reuters, Last Updated: April 30, 2025,
- Annual GDP growth of 4.3 percent beats forecast, Taipei Times, January 25, 2025
- Taiwan's Tech-Driven GDP Surge: A Beacon of Growth in a Volatile World, AI Invest, April 30, 2025
- Saudi Arabia’s fourth-quarter GDP grows by 1.3%, Investing.com, Published September 03, 2025
- Saudi Arabia's GDP expands 2.7% in first quarter, The Economic Times, Reuters, Last Updated: May 01, 2025
- United Arab Emirates, World Bank, as of April 10, 2025
- IMF Regional Economic Outlook for Asia and Pacific April 2025
- Consumer Price Index, Australia, Australia Bureau of Statistics, Reference period March Quarter 2025, Released April 30, 2025
- Australian Inflation Rate: Wages Rise Above CPI, Forbes, Updated: May 14, 2025
- IMF - India: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for India, February 27, 2025
- Outlook for Economic Activity and Prices (April 2025), Bank of Japan
- Japan’s Economic Growth Revised Lower Ahead of BOJ Meet, Bloomberg, March 11, 2025
- Malaysia's inflation rises at slower rate of 1.8% in 2024, Star Media Group, April 29, 2025
- A Phased Fuel Subsidy Reform Makes Better Sense, ASEAN+3 Macroeconomic research office, April 07, 2025
- Macroeconomic Review Volume XXIV Issue 1, Apr 2025, Monetary Authority of Singapore, Published Date: April 28, 2025
- IMF - Republic of Korea: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Korea, February 07, 2025
- Inflation rate in Taiwan may rise above 2% this year: Central bank, Focus Taiwan, December 03, 2025
- Taiwan freezes electricity prices, reports power utility losses of $13 bln, Reuters, March 28, 2025
- CPI rises on crop supply disruptions, Taipei Times, December 06, 2024
- Housing prices drive Saudi inflation to 1.7%: GASTAT, Arab News, Updated January 15, 2025
- Quarterly Economic Review, Central Bank of the UAE, March 2025
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