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BEIJING, March 25 (APP): The Boao Forum for Asia (BFA) on Tuesday forecasted that Asia’s economy will grow by 4.5 percent this year, slightly higher than the 4.4 percent recorded in 2024.

The region continues to be a key “growth engine” for the world economy despite challenges such as geopolitical tensions, inflationary pressures and global supply chain disruptions, BFA said in its latest 2025 report on the economic outlook and integration progress for Asia.

The report said that Asia’s share of the global economy will continue to rise in 2025 to 36.4 percent at market exchange rates, rising from 36.1 percent in 2024. Its share in terms of purchasing power parity is expected to increase to 48.6 percent in 2025, up from 48.1 percent in 2024. RCEP boosts regional trade and investment integration

The report highlighted that goods trade growth is gradually recovering, while services trade continues to expand at a robust pace, particularly in tourism, transport and digital services. China has played a significant role in this growth, with both its goods and services trade reaching record highs, said BFA.

The Regional Comprehensive Economic Partnership (RCEP) has further accelerated regional trade integration, with intra-RCEP trade increasing by approximately 3 percent year on year in 2024.

Digital trade and e-commerce are also emerging as key engines of growth, particularly in Southeast Asia. The report underscored that ASEAN’s e-commerce gross merchandise value grew by 15 percent year on year, reflecting the region’s rapid digital transformation.

At the same time, Asian financial markets remain broadly stable, with most major economies expected to maintain accommodative monetary policies to support economic expansion, according to the report.

It noted that although external investment into Asia has faced fluctuations due to global uncertainties, intra-regional foreign direct investment remains strong, with China, Japan and ASEAN member countries leading as top investment destinations. Market integration and policy coordination challenges. Despite these positive trends, the BFA report warned that several challenges could further slow economic integration.

Market integration within Asia remains incomplete, as many economies still rely heavily on exports to the United States and Europe. Furthermore, the utilization rate of RCEP trade rules among some member states remains low, limiting the full potential of the agreement.

In addition, policy coordination and dispute resolution mechanisms require further enhancement to improve trade facilitation and regulatory harmonization within the region.

The report concluded that while Asia continues to drive global economic growth, sustaining this momentum will require stronger regional cooperation, deeper economic integration, and further investment in digital and service industries.