Mastercard Economics Institute: APAC growth expected to hold steady in 2025; global policy resets may see shift in gears

New Delhi:  The Mastercard Economics Institute (MEI) has released its annual economic outlook for 2025, forecasting continued growth for Asia Pacific aligned with 2024 levels, while lower inflation and easing interest rates are set to provide relief to consumers and households. This is largely in line with broader economic trends, as the global economy is expected to see 3.2 percent growth following a pace of 3.1 percent in 2024. The report highlights India as the fastest-growing major economy with an anticipated GDP growth of 6.6% and consumer spending projected to rise by 6.2% in 2025. Buoyed by a robust middle class and sustained investment, India remains resilient amidst global economic challenges is likely to be among the top contributors to global growth in 2025 led by multiple growth levers.

The country is also witnessing growth of “The SHEconomy” as MEI highlights that women’s cyclical labor force participation rate has more than fully recovered to 2019 levels and India stands out with participation among women aged 25-54 up 12 percentage points from 2019 to 2023, compared to a 1 percentage point gain for men of the same age. As the disinflationary environment eases the burden on consumers, MEI forecasts that APAC will see tight labor markets and a catch-up of inflation-adjusted wages, which is expected to contribute to increased spending—especially on discretionary items, including big-ticket purchases such as electronics, furniture and appliances. While some of the pent-up demand for experience spending has subsided, consumers are still prioritizing big-ticket moments, such as major concerts and events.

 

“If 2024 was about ‘getting back to normal’, 2025 is about normalization as volatility subsides and easing monetary policy allows consumers to benefit from economic growth,” said David Mann, chief economist, Asia Pacific, Mastercard. “However, policy decisions like potential interest rate rises in Japan or U.S. tariffs could significantly impact this growth. Businesses should leverage consumer optimism while preparing for potential trade disruptions.”