As China’s economy slows, economic growth in the Asia-Pacific region will shift away from China toward South Asia and Southeast Asia according to S&P Global. India’s economy will drive Asia’s growth in the next few years, leading regional growth, the Manhattan NYC-based credit agency projects.
India’s GDP for the fiscal year ending March 2024 is forecast to hit 6.4%, higher than S&P’s previous 6% projection, due to increased domestic consumption balancing high inflation and poor exports. Other emerging Asian markets such as Indonesia, Malaysia, and the Philippines also expect solid GDP growth in 2023-2024 thanks to robust domestic demand.
Despite optimistic Asia-Pacific growth forecasts, risks such as Middle East energy shocks and a potential hard landing of the U.S. economy led S&P to lower its 2023 forecast for the Asia-Pacific region (excluding China) to 4.2% from 4.4%.
In summary, India is poised to lead increasing South and Southeast Asian economic growth in the years ahead, while China’s economy slows further amidst ongoing real estate and municipal finance pressures. But risks such as inflation and potential U.S. or Middle East crises could dampen the otherwise positive Asia-Pacific growth story. The center of regional economic gravity looks set to slowly shift from a slowing China toward faster-growing India and Southeast Asia.
Last updated: December 26th, 2025
