The ASEAN+3 Macroeconomic Research Office (AMRO) has projected steady economic growth of 4.2% for the ASEAN+3 region in 2025, according to its latest quarterly update of the ASEAN+3 Regional Economic Outlook (AREO).
While the region is expected to perform robustly, supported by strong domestic demand and an export recovery, rising trade tensions—particularly higher U.S. tariffs on Chinese imports—present significant risks to external demand. Cambodia, however, is forecasted to surpass many of its regional counterparts with a projected GDP growth of 5.7%, reflecting its vibrant domestic economy and increasing investment opportunities.
The ASEAN+3 region, which includes the 10 ASEAN member states along with China, Japan, and Korea, is anticipated to sustain its 4.2% growth momentum into 2025, following a similarly strong performance in 2024. This growth is attributed to resilient domestic consumption and a revival in manufacturing exports. Cambodia, benefiting from infrastructure development and rising foreign investment, is expected to grow by 5.7%, outpacing the ASEAN average of 4.8%.
Inflation across the region has eased considerably, returning to pre-pandemic levels. Headline inflation stood at 1.7% in 2024 and is expected to remain controlled at 2.1% in 2025, despite potential risks from global commodity price fluctuations and unfavorable weather conditions. Cambodia’s inflation rate is projected to remain stable at 1.5%, reinforcing confidence among consumers and businesses.
AMRO’s latest growth forecast for 2025 is slightly lower than its earlier estimate of 4.4% in October 2024, reflecting anticipated trade disruptions. The U.S. is expected to introduce higher tariffs on Chinese imports in the latter half of the year, a move that could significantly affect the Plus-3 economies (China, Hong Kong, Japan, and Korea), whose growth projection has been revised to 4.0%. In contrast, ASEAN economies, including Cambodia, are expected to be less impacted, with the bloc’s GDP forecasted to expand by 4.8% in 2025.
AMRO also highlighted key uncertainties that could influence the region’s economic outlook. These include potential shifts in U.S. monetary policy, escalating trade disputes, and persistent inflationary pressures in advanced economies. The policies of the new U.S. administration, particularly tariff hikes and tax reductions, could intensify inflation risks and tighten external financial conditions for ASEAN+3 economies.
In response to these challenges, several regional central banks have begun easing monetary policies amid declining inflationary pressures. However, an upward revision of U.S. interest rate expectations could widen the gap between U.S. and regional interest rates, making monetary policy management more complex for ASEAN+3 economies.
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