The MEI’s report for the Asia Pacific region also highlighted India as the fastest-growing major economy with an anticipated GDP growth of 6.6 per cent and consumer spending projected at 6.2 per cent in 2025.

“Buoyed by a robust middle class and sustained investment, India remains resilient amidst global economic challenges is likely to be among the top contributors to global growth in 2025 led by multiple growth levers,” the report added.

India has also witnessed outstanding growth in women’s labour force participation rate among women aged 25-54, up 12 percentage points from 2019, compared to a 1 percentage point gain for men of the same age.

The growth of “The SHEconomy” has led women’s cyclical labour force participation rate in India to more than fully recovered to 2019 levels.

MEI forecasts 3.2 per cent global GDP growth in 2025, following a 3.1 per cent pace in 2024. Growth is expected to remain strong in the US, India, and the Gulf Cooperation Council (GCC), with modest expansion in Europe and much of Latin America and the Caribbean (LAC).

“If 2024 was about ‘getting back to normal’, 2025 is about normalisation as volatility subsides and easing monetary policy allows consumers to benefit from economic growth,” said David Mann, chief economist, Asia Pacific, Mastercard. “However, policy decisions like potential interest rate rises in Japan or US tariffs could significantly impact this growth. Businesses should leverage consumer optimism while preparing for potential trade disruptions,” Mann added.

The report highlighted the crucial role of remittances for APAC economies, with four of the top five recipient countries being in the region, including India.

Japan faces a unique economic environment with continued inflation volatility and the Yen at historic lows, contributing to the ongoing tourism boom and spending on high-end luxury goods.

Australia, New Zealand and Singapore, having experienced stronger inflation shocks than the rest of the region, are likely to see relief as levels fall to approximately 2-3 per cent and central banks ease their respective monetary policies, said the report.

“The policies of individual governments could have substantial knock-on effects in 2025,” said Mann.