Asian Development Bank Lowers 2026 Asia-Pacific Growth Forecast

The Asian Development Bank lowered its 2026 economic growth forecast for developing Asia and the Pacific to 4.9%, a 0.2 percentage point decrease from its April projection. The bank attributed the downgrade to prolonged energy market disruptions and supply chain issues caused by conflict in the Middle East, which also impacted fertilizer markets. Regional inflation for 2026 is now projected to reach 4.3%, up from 3.0% in 2025.

Specific national forecasts saw significant downward revisions. India's 2026 growth forecast was cut to 6.6% due to dampened domestic demand from high energy costs, while China's outlook remained steady at 4.6%. In South Asia, the bank projected GDP growth of 4.5% for Bangladesh in fiscal year 2026-27—lower than the Bangladeshi government's 6.5% target—and 3.7% for Pakistan for FY27, missing Pakistan's 4% target. Inflation is expected to rise in both nations, reaching 8.8% in Bangladesh and 8.3% in Pakistan.

The bank also lowered the growth forecast for the Caucasus, Central and West Asia region to 3.8% for 2026, citing Russian trade restrictions affecting Armenia and weak growth in Türkiye. While the ADB maintained its 2027 regional growth forecast at 5.1%, it warned that tighter global financial conditions and continued geopolitical instability pose significant risks to the pace of recovery.