The Asian Development Bank (ADB) has revised down its growth projections for developing Asia and the Pacific, citing weaker exports due to heightened United States tariffs, global trade uncertainty, and subdued domestic demand.
According to the Asian Development Outlook (ADO) July 2025, the region is now forecast to grow by 4.7% in 2025—down by 0.2 percentage points from its April estimate. Growth for 2026 has also been lowered to 4.6%, reflecting persistent global headwinds.
“Asia and the Pacific has weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,” said ADB Chief Economist Albert Park. He urged regional economies to reinforce fundamentals, support open trade, and pursue regional integration to sustain growth and employment.
Trade tensions and a potential escalation of U.S. tariffs are seen as key downside risks, along with geopolitical conflicts that could disrupt supply chains and push up energy costs. Concerns also linger over a further deterioration in China’s property market.
Despite these challenges, growth in the People’s Republic of China is expected to remain at 4.7% in 2025 and 4.3% in 2026, as policy measures stimulate consumption and industrial activity. India’s growth forecast has been trimmed to 6.5% for 2025 and 6.7% for 2026—down 0.2 and 0.1 percentage points, respectively—due to declining exports and investor caution.
Southeast Asia is projected to bear the brunt of worsening trade conditions, with its growth estimates lowered to 4.2% this year and 4.3% next year—each down about half a percentage point from April forecasts.
Conversely, growth projections for the Caucasus and Central Asia have been upgraded to 5.5% in 2025 and 5.1% in 2026, reflecting anticipated gains in oil production.
Inflation across developing Asia is expected to ease, supported by falling oil prices and robust agricultural output. ADB now forecasts inflation at 2.0% in 2025 and 2.1% in 2026, lower than the April projections of 2.3% and 2.2%.
Founded in 1966, ADB supports inclusive and sustainable development across Asia and the Pacific. The bank is owned by 69 members, including 50 from within the region.
