Asian Development Bank Lowers Growth Forecasts for South Asia

The Asian Development Bank lowered economic growth forecasts for several Asian nations in its September 2026 outlook, citing banking stress, energy shortages, and geopolitical instability. The lender reduced Bangladesh's fiscal year 2027 growth projection to 4 percent, down from 4.5 percent in July, falling well short of the government's 6.5 percent target. ADB Country Director Qingfeng Zhang noted that while the economy is recovering, it remains vulnerable to domestic constraints and external shocks.

In the Philippines, the bank trimmed the 2026 GDP growth forecast to 3.3 percent from 3.8 percent, citing weak public investment and high inflation. ADB Philippines Country Director Andrew Jeffries emphasized that timely government spending on critical infrastructure and social sectors is necessary to withstand these shocks. For Pakistan, the bank projected FY2027 growth to remain at 3.7 percent, missing the government's 4 percent target, with inflation expected to average 8.3 percent.

Across the region, ADB President Masato Kanda warned that El Nino is creating growing risks, potentially driving up food and energy prices through reduced harvests and hydropower. The bank highlighted that conflict in the Middle East continues to impact economic activity, specifically threatening energy import costs and remittance inflows for countries like Pakistan.