The International Monetary Fund said Asian central banks generally have room to lower interest rates to support domestic demand and offset the impact of the escalating global trade war, with the region in much stronger shape than before the Asian financial crisis.

The organization cut its 2025 forecast for the economy’s growth to 1.8% from 2.7% in January out of concern over Trump’s tariffs.

Trump’s tariffs are forecast to slow the global economy sharply this year, the International Monetary Fund said.