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 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 analyzed 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.
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.
Increasing global economic uncertainty & climate risks challenge policymakers.
At the #APSurvey 2025 launch, I emphasized the need for sound national policies & regional coordination to secure economic prospects & address #ClimateChange.
🔗https://t.co/WNzCIcRTJ8 pic.twitter.com/NNwOvE96uw
— Armida Alisjahbana (@UN_Armida) April 8, 2025
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 before 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.
Labor 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 on 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.
