ILO Lowers 2025 Employment Forecast for Asia-Pacific Due to Global Disruptions

Employment growth in Asia and the Pacific is projected to decelerate in 2025, according to the latest World Employment and Social Outlook: May 2025 Update released by the International Labour Organization (ILO). While the region continues to lead the world in employment expansion, the new report paints a more cautious picture due to growing geopolitical tensions and trade disruptions that are dampening economic momentum.

The ILO now estimates that employment in the Asia-Pacific region will grow by 1.7%, or 34 million jobs, in 2025. This is a moderate downward revision from the previously anticipated 1.9% growth, which would have generated 38 million new jobs. The revised forecast reflects concerns over the region’s exposure to evolving global trade dynamics and mounting political instability affecting key economies.

Asia-Pacific Still Tops Global Employment Rankings

Despite the downgrade, Asia and the Pacific remain the engine of global job growth. The 1.7% projected increase surpasses other regions, including:

• Africa: 1.6%

• Americas: 1.2%

• Arab States: 1.3%

• Europe and Central Asia: 0.6%

The Asia-Pacific region's relatively strong performance is supported by its large and youthful labor force, robust domestic consumption in emerging markets, and a dynamic services sector. However, the report cautions that the current slowdown should not be underestimated.

Geopolitical and Trade Shocks Dampening Employment Prospects

The ILO attributes the revised outlook to global geopolitical instability, including trade frictions between major economies and shifting supply chains. The Asia-Pacific economy is heavily trade-reliant, and the report reveals that nearly 3% of the region's total employment—equivalent to over 55 million jobs—is directly tied to trade with the United States.

Among these, manufacturing is the most affected sector, accounting for approximately 50% of the trade-linked employment. Ongoing uncertainty around tariffs, export restrictions, and regional realignments in global value chains have increased vulnerabilities for millions of workers and businesses.

Need for Resilience: Social Protection and Market Diversification

In response to the shifting landscape, ILO Labour Economist Steven Tobin from the ILO Regional Office for Asia and the Pacific emphasized the urgency of proactive policy measures:

“While the 1.7 per cent annual employment growth for the region remains the highest worldwide, it still represents a steep decline in the estimated number of jobs expected for the region in 2025.”

Tobin highlighted the necessity of improving resilience for both workers and enterprises through a combination of policy strategies, including:

• Market Diversification: Reducing dependence on a few major trading partners by expanding access to regional and global markets.

• Social Protection Systems: Strengthening safety nets to buffer against job losses and economic shocks.

• Active Labour Market Policies: Investing in upskilling and reskilling programs to prepare workers for emerging, high-demand industries.

• Support for SMEs: Enhancing the capacity of small and medium enterprises to adapt to supply chain disruptions and digital transformation.

Long-Term Labour Market Trends in the Region

While short-term risks are evident, the report also recognizes long-term structural trends that offer opportunities for sustainable employment growth. The green economy, digital services, and healthcare sectors are identified as areas of rising labor demand.

Additionally, the ongoing shift toward informal to formal employment in several emerging economies offers hope for improving job quality and social protection coverage. Governments in the region are also beginning to embrace labor migration policies and vocational training schemes to match labor supply with future needs.

Sustaining Growth in a Changing World

The ILO report underscores that Asia-Pacific remains a global employment powerhouse, but it must navigate a complex environment shaped by geopolitical risks, trade realignments, and structural economic transformation. While the region's projected growth still leads the world, the warning signs are clear: without strategic action, Asia’s job market could face deeper challenges ahead.

With coordinated regional efforts and international support, the region can maintain its momentum and ensure that future growth is both inclusive and sustainable.