The dry bulk spot market remained lackluster, with the Baltic indices continuing their downward trajectory.
Growth in Asia is projected to decelerate in 2024 and 2025, reflecting the diminishing impact of pandemic recovery and long-term structural factors such as population aging. However, the region’s short-term outlook has been revised upward since April by the IMF, with regional growth in 2024 now forecast at 4.6 percent, an increase of 0.1 percentage point. This improvement is mainly attributed to stronger-than-expected early-year performance, with Asia and the Pacific expected to contribute around 60 percent of global growth this year. Growth remains robust in emerging market economies of the region, while advanced economies are facing challenges. For 2025, the growth forecast for the region has also been adjusted upward by 0.1 percentage point to 4.4 percent, with looser global and domestic monetary policies anticipated to stimulate private demand. Nevertheless, substantial economic and geopolitical uncertainties cloud the broader outlook.
In advanced Asian economies, growth is projected to decline to 1.6 percent in 2024, down from 2.0 percent in 2023, before rebounding to 1.9 percent in 2025. Japan’s 2024 growth forecast has been revised downward to 0.3 percent due to temporary supply chain disruptions, although a recovery to 1.1 percent is anticipated in 2025, supported by strong real wage growth that is expected to enhance private consumption. South Korea and other advanced economies in the region are benefiting from resilient global demand for technology products, with South Korea’s growth projection upgraded to 2.5 percent for 2024. However, a modest deceleration to 2.2 percent is likely in 2025, reflecting a gradual shift from external to domestic demand. Meanwhile, Australia and New Zealand continue to face challenges stemming from restrictive monetary policies. Australia’s growth forecast for 2024 has been revised downward to 1.2 percent, with both economies expected to recover in 2025 as private demand strengthens alongside real income growth.
For emerging market economies in Asia, growth is expected to decelerate, but at a more moderate pace than initially forecast. The growth forecast for Emerging Asia has been revised up by 0.1 percentage point for both 2024 and 2025, now at 5.3 percent and 5.0 percent, respectively. In China, growth for 2024 has been revised down to 4.8 percent, reflecting weaker-than-expected domestic demand in the second quarter, although the forecast still aligns with the government’s growth target. In 2025, China’s growth is expected to slow to 4.5 percent due to the combined effects of an aging population and slower productivity growth, although a recovery in the property market could support domestic demand. India’s 2024 growth forecast has been revised up by 0.2 percentage point to 7.0 percent, driven by improved rural consumption and expanding public infrastructure investment. These trends are expected to continue into 2025, maintaining India’s position as the world’s fastest-growing major economy. Meanwhile, the ASEAN region is projected to grow at a robust 4.6 percent in 2024 and 4.7 percent in 2025, largely supported by strong domestic demand and export performance. Growth in Indonesia, the Philippines, and Vietnam is expected to remain strong, while Thailand's growth is anticipated to be more subdued.
Despite the IMF’s upward revisions to India’s growth outlook, recent data highlight vulnerabilities within the economy, particularly in manufacturing and consumption. Real GDP growth slowed to 5.4 percent year-on-year in the July–September quarter of 2024, marking the weakest pace in seven quarters and a sharp deceleration from the 8.1 percent recorded in the same period last year. This downturn also contrasts with the 6.7 percent growth seen in the preceding quarter, signaling a clear loss of economic momentum. Manufacturing growth slowed to just 2.2 percent in the second quarter of fiscal year 2024–2025, a stark contrast to the 14.3 percent expansion seen a year earlier. Similarly, mining and quarrying contracted by 0.1 percent, following an 11.1 percent rise in the previous year. On the other hand, agriculture demonstrated resilience, with growth accelerating to 3.5 percent during the quarter. Consumption growth, a critical driver of India’s economic performance, also showed signs of strain, slowing to 6.0 percent compared to 7.4 percent in the prior quarter. Rising food prices, sluggish wage growth, and higher borrowing costs have dampened urban spending, offsetting stronger rural demand. These challenges have also impacted the services sector, which relies heavily on discretionary spending. Despite these obstacles, the Indian government remains optimistic about a recovery in the latter half of the fiscal year, bolstered by increased rural demand following a favorable monsoon season and higher government expenditure.
While Asia’s growth prospects remain vital to the global economy, the dual forces of structural challenges and cyclical slowdowns in key economies like China and India cast a shadow over the broader outlook. Advanced economies in the region face persistent headwinds, while emerging markets continue to demonstrate resilience, albeit with moderating growth rates. Against this backdrop of economic uncertainty across Asia, the dry bulk spot market remained lackluster, with the Baltic indices continuing their downward trajectory.
Data source: Doric