The East Asia and Pacific (EAP) region is growing faster than the rest of the world but is facing new challenges that threaten to slow its momentum. According to the World Bank’s October 2025 East Asia and Pacific Economic Update, regional growth is projected to slow to 4.8% in 2025, down from 5.0% in 2024, and is expected to decline further to 4.3% in 2026.
This sluggishness is attributed to a less favorable external environment, including rising trade restrictions and global uncertainty, as well as domestic policy choices that favor short-term fiscal stimulus over structural reforms.
The East Asia and Pacific economic update 2025
The World Bank’s report identifies a “jobs paradox” in the region: despite strong economic growth, there is an insufficient creation of quality jobs. Most recent job growth has been in low-productivity, often informal, service sectors that offer limited opportunities for advancement.
Additionally, young people are struggling to find employment, and women’s participation in the labor force remains low. The World Bank’s Vice President for East Asia and Pacific, Carlos Felipe Jaramillo, stressed that bolder reforms are needed to remove barriers to firm entry and competition, which would unlock private capital and allow dynamic companies to flourish and create new job opportunities.
The report highlights two key challenges facing the region: trade protection and job automation. Workers must contend with the increasing use of robotics, AI, and digital platforms, which are reshaping industries and demanding new skills. The report calls for investments in human capital and digital infrastructure, greater competition in services, and policies that better align job opportunities with people’s skills.
What this means for skilled workers
While many people in the East Asia and Pacific region who seek work can find it, the World Bank report warns that a significant number of new jobs are low-skill and offer limited career progression. For skilled workers, this highlights the growing competition for high-quality, productive roles.
The report’s emphasis on the impact of technology like AI and digital platforms means that professionals must continuously adapt and acquire new skills to remain competitive. The call for reforms to education and the business climate is a positive sign for skilled workers, as it aims to create more opportunities that match their capabilities.
What this means for employers
For employers, the World Bank’s report reveals a dual challenge and opportunity. On one hand, the region’s slowing growth and global uncertainties create a more difficult environment for business.
On the other hand, the vast pool of talented workers, particularly in countries like the Philippines and Vietnam, which are leading in regional growth, presents an opportunity to address domestic skills shortages. However, the report also notes that the region’s leading firms are not fully leveraging new technologies and productivity gains.
To overcome these challenges and tap into the region’s talent pool, businesses can partner with a global hiring solution like Multiplier. A company like Multiplier provides an Employer of Record (EOR) and Contractor of Record (COR) solution to help you hire and manage talent in over 150 countries without the legal and administrative complexities of setting up a local entity. By using a platform like Multiplier, you can ensure:
- Worker classification compliance: Correctly classify workers based on local laws to avoid misclassification risks and penalties.
- Simplified payroll: Pay employees and contractors accurately and on time in their local currency, with Multiplier handling tax withholding, reporting, and documentation.
- Efficiency: Streamline onboarding and manage your global workforce from a single, centralized platform, freeing up internal resources.
Conclusion
The World Bank’s October 2025 Economic Update for the East Asia and Pacific region paints a picture of a dynamic region that, while outperforming its peers, faces significant headwinds from global and domestic factors. The report’s findings on the “jobs paradox” and the challenges of automation underscore the need for bold policy reforms to foster high-quality employment.
For businesses looking to expand into this critical market, solutions like Multiplier provide the necessary tools and expertise to navigate the complexities of international hiring, allowing them to remain compliant and competitive while accessing the region’s immense talent pool.
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FAQs
What is the main finding of the World Bank's October 2025 Economic Update for East Asia and the Pacific?
The main finding is that while the East Asia and Pacific (EAP) region is still growing faster than the rest of the world, its growth is slowing. The report highlights a "jobs paradox" where economic expansion has not created a sufficient number of high-quality, productive jobs.
What are the key growth projections for the East Asia and Pacific region for 2025 and 2026?
The World Bank projects the East Asia and Pacific region's growth to be 4.8% in 2025, a slight decrease from 5.0% in 2024. This growth is expected to slow further to 4.3% in 2026.
What are the main challenges to job growth in the East Asia and Pacific region?
The report identifies several challenges, including the fact that recent job growth has been concentrated in low-productivity, informal service jobs. Other issues include high youth unemployment in some countries, low labor force participation by women, and the increasing impact of automation and AI, which demands new skills from workers.
What reforms does the World Bank recommend for the region?
The World Bank calls for ambitious and "bolder reforms" to address the region's challenges. Key recommendations include investments in human capital and digital infrastructure, greater competition in the services sector, and policies that align job opportunities with workers' skills. The report also emphasizes structural reforms over short-term fiscal stimulus.
How can businesses mitigate the risks highlighted in the World Bank report when hiring in the region?
The report highlights challenges like policy uncertainty and the need for new skills. Businesses can mitigate these risks by using an EOR solution like Multiplier, which helps them compliantly hire talent in the EAP region without establishing a local entity. This approach allows companies to quickly onboard and pay workers while ensuring compliance with local labor laws and tax regulations, freeing them from complex administrative tasks.
