credit: Adobe Stock Asset /
Pingpao
Bangkok, 8 April
2025
Despite driving 60 per cent of the world’s
economic expansion in 2024, several countries in the
Asia-Pacific region are still not ready to cope with climate
shocks and the implications of transitioning to a greener
system, according to the 2025 edition of the Economic and
Social Survey of Asia and the Pacific.
Published
today by the United Nations Economic and Social Commission
for Asia and the Pacific (ESCAP), the report highlights the
complex macroeconomic-climate interplay. It outlines the
challenges testing the economic resilience of the region –
including slower productivity growth, high public debt risks
and rising trade tensions.
“Increasing global
economic uncertainty and deepening climate risks are also
not making it easy for the fiscal and monetary
policymakers,” said Armida Salsiah Alisjahbana, United
Nations Under-Secretary-General and Executive Secretary of
ESCAP. “Navigating this evolving landscape requires not
only sound national policies but also coordinated regional
efforts to safeguard long-term economic prospects and tackle
climate change.”
Among the 30 countries
analysed in the Survey, 11 were identified as more exposed
to climate risks from the macroeconomic perspective:
Afghanistan, Cambodia, the Islamic Republic of Iran,
Kazakhstan, the Lao People’s Democratic Republic,
Mongolia, Myanmar, Nepal, Tajikistan, Uzbekistan and Viet
Nam.
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There are also significant
disparities in coping ability across the region. While some
countries have mobilized sizeable climate finance and
adopted green policies, others face a range of challenges,
including fiscal constraints, weaker financial systems and
limited public financial management capacity.
The
Survey delves into how countries are undertaking policies to
manage the diverse economic challenges of climate change.
For example, balancing industrial growth with climate goals
in the Republic of Korea, addressing climate risks due to
the dependence on agriculture in Lao PDR and on fossil fuels
in Kazakhstan, and advancing policy action in coastal
economies like Bangladesh and small island nations like
Vanuatu that face severe climate impacts.
Despite
remaining relatively vibrant in comparison with the rest of
the world, average economic growth in the developing
economies in the Asia-Pacific region slowed to 4.8 per cent
in 2024 from 5.2 per cent in 2023 and 5.5 per cent during
the five years prior to the COVID-19 pandemic. In the case
of least developed countries, the 2024 average economic
growth rate of 3.7 per cent was significantly lower than the
7 per cent per annum GDP growth target set out in
Sustainable Development Goal 8.
Labour productivity
growth in Asia and the Pacific has slowed significantly
since the global financial crisis in 2008, with stagnating
income convergence with the world’s advanced economies.
Between 2010 and 2024, only 19 of 44 Asia-Pacific developing
countries achieved income convergence, leaving 25 further
behind.
To secure long-term economic prosperity, the
Survey underscores the need for proactive government support
in upgrading into more productive, higher value-added
economic sectors. The region also needs to capitalize its
robust competitiveness in green industries and value chains
as new engines of economic growth, as well as embrace
inclusive regional economic cooperation, which serves the
development aspirations of both developed and developing
countries.
