A year ago, the IMF projected that growth across Asia would begin to cool through 2024 and 2025 as the momentum from the postpandemic rebound gradually faded and longer-term structural challenges – most notably demographic aging – started to exert greater influence on regional economic performance. Even so, the Fund’s outlook at the time had turned marginally more positive versus the April update, with the 2024 GDP forecast nudged higher to 4.6 percent, an increase of 0.1 percentage point. For advanced Asian economies, growth was expected to ease from 2.0 percent in 2023 to 1.6 percent in 2024, before edging back to 1.9 percent in 2025. Among emerging Asian economies, the slowdown was expected to be more measured than previously anticipated, with forecasts for both 2024 and 2025 revised up by 0.1 percentage point to 5.3 percent and 5.0 percent respectively. At that time, China’s 2024 projection had been revised down to 4.8 percent after weaker-thanexpected domestic demand in the second quarter, though the figure remained broadly aligned with Beijing’s policy agenda. A further moderation to 4.5 percent was expected in 2025, reflecting demographic headwinds and slowing productivity, with the caveat that a stabilising property sector could support demand. Conversely, India’s profile had stood out from the regional pattern – its 2024 growth forecast was upgraded to 7.0 percent on the back of recovering rural consumption and continued public investment in infrastructure, with the same drivers expected to secure India’s position as the fastest-growing major economy again in 2025.
A year later, Asia and the Pacific remain firmly positioned as the locomotive of the world economy, projected to account for roughly 60 percent of global growth in 2025 despite a progressively more challenging international landscape, according to the IMF. The region is expected to maintain a stable 4.5 percent expansion next year and then ease to 4.1 percent in 2026. Importantly, this expected slowdown is less pronounced than the IMF’s April 2025 assessment, owing in part to a lower-than-anticipated increase in the effective tariff rates applied by the United States. Solid export momentum, the ongoing upcycle in the technology and semiconductor sectors, and continued policy accommodation under broadly supportive global financial conditions are expected to underpin growth in 2025. Yet the region is far from insulated. A softening external environment, tarifflinked uncertainty, and a slower medium-term growth ceiling present genuine challenge. Policymakers will be required to navigate the immediate risks while accelerating structural reforms, particularly those aimed at strengthening domestic drivers of growth.
For advanced Asia, growth in 2025 is projected at 1.6 percent, roughly in line with 2024. For the emerging economies of the region, activity is expected to slow marginally to 5.2 percent from 5.3 percent in 2024 amid trade frictions and pricing uncertainty. China’s expansion is forecast to taper from 5.0 percent this year to 4.8 percent in 2025 – an upgrade compared with April, driven by a stronger export pipeline and the effects of fresh fiscal stimulus. However, frontloaded shipments in early 2025 are expected to be followed by a phase of normalization later in the year, resulting in a more pronounced slowdown to 4.2 percent in 2026. India, in contrast, continues to defy an otherwise moderating regional cycle. Growth is projected at 6.6 percent this year, slightly higher than the 6.5 percent recorded in 2024. The improvement is due to a combination of stronger-than-expected Q2 results and the ongoing benefits of the GST (tax adjustments) reform, which together outweigh the dampening effects of higher U.S. tariffs.
India’s latest quarterly reading underscores the point. GDP expanded 8.2 percent year-on-year in July-September, accelerating from 7.8 percent in the previous quarter and outperforming Reuters’ consensus forecast of 7.3 percent. The result came despite the headwind of an additional 25 percent U.S. tariff on Indian exports – raising the total levy to 50 percent – at a time when the rupee remained weak and exports were trending lower. Under the IMF’s baseline scenario, real GDP is projected at 6.6 percent in FY2025/26, supported by the strong Q2 outturn, the lasting impact of the GST reform and a Q3 nowcast pointing to sustained momentum, more than offsetting the drag from U.S. tariffs. Growth is expected to ease to 6.2 percent in FY2026/27 as those tariffs exert a more material impact on external demand and investment. Risks remain two-sided. New trade agreements and steady execution of domestic reform could turbocharge exports, investment and job creation. Conversely, escalating trade tensions and deeper geo-economic fragmentation could tighten financial conditions and undermine trade, capital flows and growth. A sharp deterioration in household confidence – triggered by market volatility, weaker equity valuations or stricter credit conditions – would weigh on consumption. Climate variability adds uncertainty in both directions by influencing harvests, rural incomes and food prices.
Despite an increasingly complex backdrop, the IMF has been explicit in emphasising the continued strength and resilience of India’s macroeconomic framework. For the dry bulk shipping sector – which is currently enjoying an unusually buoyant winter – the sustained outperformance of the world’s fourth-largest economy could play an outsized role in maintaining trade momentum at a moment when two of the main pillars of global demand are moving in opposite directions. The United States, increasingly inward-focused, is generating less spillover activity for global trade, while China – still central to bulk commodity flows – is navigating a slower growth phase and reassessing the foundations of its development model. In this context, India offers what the dry bulk market rarely experiences: incremental, broad-based demand growth anchored in steelintensive infrastructure investment, expanding energy needs, and rising household consumption. If sustained, India’s trajectory has the potential not only to cushion volatility in global freight markets but also to reshape tonne-mile dynamics. For an industry accustomed to cyclical highs that fade as quickly as they arrive, India’s expansion – should it stay on course – has the potential to shift from providing supplementary support to acting as a central driver capable of redefining the balance of global bulk commodity flows.
Data source: Doric