London Daily

Focus on the big picture.
Friday, Jul 04, 2025

Asia’s growth to outpace both US and Europe this year, Morgan Stanley says

Asia’s growth to outpace both US and Europe this year, Morgan Stanley says

Driven by strong domestic demand, Asia’s economic growth will outpace both the US and Europe this year, according to Morgan Stanley.
“The big argument that we’ve been making ... for Asia, including Japan, to outperform versus US and Europe – is the fact that there is domestic demand strength,” Chetan Ahya, chief Asia economist at the investment bank , told CNBC’s “Street Signs Asia” on Monday.

“China is one. It’s going through a rebound quite nicely because of reopening, but also for fiscal and monetary policy being supportive.”

The economist added that three other large Asian economies – India, Indonesia and Japan – are also showing robust domestic demand.

“We are expecting the region’s growth to outperform by about 500 basis points by the end of this year, which is essentially in the fourth quarter of this year,” said Ahya.

The economist’s forecast for the region corresponds with the latest International Monetary Fund view that Asia Pacific remains a dynamic region despite a challenging year for the world economy.

“We project the region will contribute more than 70 percent of global growth this year as its expansion accelerates to 4.6 percent from 3.8 percent last year,” the IMF wrote in a blog.

China’s recovery is “going better than everybody’s expectations,” said Ahya, and he doesn’t see inflation as a major risk for the country.

“Inflation is a lagging data point and I don’t think we should look at the inflation number and conclude that the recovery is not going on track,” he noted, adding China’s property sector is “rebounding so sharply” which will add to the growth momentum.

More people in China want to buy houses again, according to a first-quarter survey recently released by the People’s Bank of China. The increase follows the end of China’s pandemic controls.

The World Bank also expects East Asian and Pacific economies to grow more than it previously estimated due to a sharp rebound in activities in China.
India also shows strong growth potential due to cyclical factors, said Ahya.

“The banking system has been cleaned up, [the] corporate sector has delivered,” noted the economist.

As a result, there has been a “nice acceleration in credit growth” because there is risk appetite seen in both borrowers and lenders, he added.
Newsletter

Related Articles

0:00
0:00
Close
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
×