Chief Economists Outlook September 2025

Figure 3 : Growth Looking at the year ahead, what is your expectation for economic growth in the following geographies? Very weak Weak Moderate Strong Very strong Middle East and North Africa South Asia East Asia and the Pacific Latin America and the Caribbean China Sub-Saharan Africa Central Asia Europe United States14 3 66 28 3 3 317 45 28 29 11 40 4057 378 7 457 1456 1234 2153 2748 34 3 Share of respondents (%)3 49 49 Source: Chief Economists Survey. (August 2025). China China’s growth outlook remains relatively strong, though signs of slowing momentum are emerging.37 Of the chief economists surveyed, 71% expect moderate or stronger growth over the coming year. GDP expanded by 5.2% year-on-year in the second quarter,38 but industrial output growth slowed to 5.2% in August, its slowest pace since November 2024, and retail sales grew by just 3.4%, down from 3.7% in July.39 After growing by 7.2% in July as the tariff truce with the US faced possible expiry, exports only added 4.4% in August.40 Although that truce was later extended for 90 days, postponing new tariffs and allowing more time for bilateral negotiations, new tariffs by Mexico, the world’s largest buyer of Chinese cars, added new uncertainty for Chinese exports.41 Inflation concerns are at the opposite extreme to those in the US, with 55% of chief economists expecting low inflation and 38% expecting very low inflation over the next year. Producer price deflation eased from 3.6% in July to 2.9% in August, suggesting that measures taken to exit a deflationary spiral were showing some success.42 Despite policy efforts to boost demand,43 price weakness intensified in August as consumer prices started falling by 0.4%.44 In the context of a slumping housing market, households are pouring their record savings into the stock market, causing Chinese equities to surge.45 Three-quarters of respondents expect both fiscal and monetary policy to loosen further in the year ahead.East Asia and the Pacific The broader East Asia and the Pacific region is expected to maintain steady growth, though headwinds from trade tensions are mounting. Fifty- three percent of chief economists surveyed expect moderate growth in the year ahead, with another 30% anticipating an even stronger performance. Japan’s economy grew at an annualized rate of 2.2% in the second quarter of 202546 but now faces pressures from a new trade agreement with the US, which imposed a 15% tariff on all imports of Japanese goods, equivalent to one-fifth of Japan’s exports.47 In July, Japanese exports dropped by 2.6%, the steepest decline in four years, as shipments to the US dropped by more than 10%.48 The ripple effects of US tariffs are weighing on sentiment across the region. Reflecting this, the Asian Development Bank has revised its 2025 growth forecast for East Asia down to 4.3%, while the Pacific region’s forecast remains unchanged at 3.9%.49 Inflation expectations remain contained: 58% of chief economists surveyed expect moderate inflation for the region in the year ahead. In Japan, inflation eased only slightly from 3.3% in June to 3.1% in July, keeping price dynamics a central concern.50 Fiscal policy is expected to remain steady, with over three-quarters of respondents predicting no significant changes. Similarly, 64% expect monetary policy settings to hold, suggesting that stability, rather than stimulus, will define policy choices in the near term. Chief Economists’ Outlook September 8