ADB Trims Developing Asia's Growth Outlook

(RTTNews) - The Asian Development Bank trimmed developing Asia's growth outlook citing the impact of higher US trade tariffs on exports.

Developing Asia is forecast to grow 4.8 percent this year, down from the previous outlook of 4.9 percent, the ADB said in its Asian Development Outlook, released Tuesday. Similarly, the projection for next year was downgraded to 4.5 percent from 4.7 percent.

The ADB said updated trade agreements will weigh on exports and growth in the region despite the implementation of stimulus measures.

The revisions reflect downgrades for India, hit by steep tariff hikes, and Southeast Asia, driven by a worse and more uncertain global environment, the ADB said.

India's economic growth forecast was lowered to 6.5 percent this year from April's outlook of 6.7 percent. Likewise, the projection for 2026 was reduced to 6.5 percent from 6.8 percent.

In contrast, growth forecasts for the People's Republic of China's were kept unchanged, with policy support and export diversification expected to cushion tariff and property market challenges. China's growth was projected at 4.7 percent this year and 4.3 percent in 2026.

East Asia is forecast to grow 4.4 percent this year, unchanged from April forecast, but 3.9 percent outlook for 2026 was revised down from 4 percent.

Due to the expectation of a larger impact from US tariffs, South Asia's growth is seen at 5.9 percent this year, down from 6.0 percent estimated in April. The estimate for next year was trimmed to 6 percent from 6.2 percent.

The ADB expects Southeast Asia to grow 4.3 percent each this year and next. Projections for 2025 were lowered for nearly all Southeast Asian economies.

The Pacific growth forecast for 2025 was upgraded by 0.2 percentage points and that for 2026 was reduced by 0.2 percentage points. The Pacific region was expected to grow 4.1 percent in 2025 before slowing to 3.4 percent in 2026.

Inflation in developing Asia was projected to ease further in 2025, driven by lower energy and food prices, before edging up in 2026. The agency downgraded its 2025 inflation forecast to 1.7 percent from 2.3 percent.

For 2026, inflation was forecast to edge higher to 2.1 percent, slightly up from April's forecast of 2.2 percent, partly due to normalization of food prices.