Asia is expected to drive the return of emerging markets, even as China’s economy slows, according to a French asset management firm.
With geopolitical and political changes creating “a more fragmented world,” new opportunities are likely to emerge in global reorganization as companies adapt by forming new partnerships and relocating operations, Amundi said.
In his Global Investment Outlook 2025Amundi highlighted that emerging Asian economies have demonstrated “robust growth”, driven by regional integration and technology supply chain dominance.
Commenting on global growth trends, Monica Defend, director of Amundi Investment Institute, predicts slower growth overall. But with the U.S. economy expected to slow and Europe positioned for a modest recovery, emerging markets are expected to maintain higher growth than developed economies.
“We expect global growth to slow to 3.0 percent in 2025 and 2026. The growth gap between emerging and developed markets is also expected to stabilize, with emerging market growth of +3.9 percent and of the DM by +1.6 percent over the next two years,” she said. .
“We expect the U.S. economy to decelerate slightly toward a soft landing, Europe’s recovery to potential growth to be modest and gradual, and Asia to remain a major engine of growth, despite the slowdown of China.”
Amundi notably explained that emerging Asia should continue to benefit from growing regional integration and resilience, while continuing its evolution towards “more strategic objectives”.
The two most notable Asian countries are India and Indonesia, with these two countries described as “most insulated” from the impact of President-elect Donald Trump’s policies.
“India and Indonesia are positioned as long-term beneficiaries, while we anticipate continued redirection and policy support to stabilize the Chinese economy and mitigate the possible negative impact of tariffs,” the report said .
Amundi’s outlook projects that resilient economic growth will continue in India, normalizing to around 6.5% in 2026, driven by a combination of domestic demand and investment.
Separately, Federated Hermes highlighted India’s strategic partnership with the United States in the Indo-Pacific region, countering China’s growing influence.
Under Trump, India and the United States are expected to continue strengthening their defense ties and, given that India’s economy is “largely driven by its own domestic forces”, the The impacts of possible US customs duties should be relatively “discreet”.
“Depending on the direction of the Trump administration, there could be opportunities for increased economic collaboration in sectors such as technology, pharmaceuticals and manufacturing. India’s response to the various developments would also play a crucial role in shaping the future of US-India relations,” the company said.
On the other hand, China, the world’s second-largest economy, is expected to bear the brunt of Trump-era trade policies, although many expect tariffs to remain below the promised 60% on all products Chinese.
Despite this, Amundi predicts that China still has “room to react”, particularly through possible new stimulus measures.
Earlier this month, China announced a US$1.4 trillion local debt package, leaving markets disappointed due to the lack of direct stimulus measures.
According to Amundi, 2025 will mark “China’s new normal”, requiring structural reforms and policy support to counter its economic slowdown.
