ADB: growth forecasts slightly revised upwards (+5 per cent) for developing Asia
The Asian Development Bank has updated its outlook. The outlook has improved compared with July (4.9 per cent). GDP is set to fall by half a percentage point compared with 2025
from our correspondent Marco Masciaga
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NEW DELHI – The Asian Development Bank (ADB) on Wednesday published an update to its outlook, in which it forecasts that the developing economies of the Asia-Pacific region will grow by 5 per cent this year, a slight increase on the 4.9 per cent estimated in July, but half a percentage point lower than the 5.5 per cent forecast for 2025. Regional inflation forecasts have been revised downwards to 4.2 per cent for 2026, but upwards to 3.5 per cent for 2027. In both cases, these figures are significantly higher than the 3 per cent recorded last year, reflecting a revision in the average oil price from 78 to 90 dollars per barrel.
In terms of growth, the ADB estimates that the Turkish economy will expand by 2.8 per cent this year and 3.6 per cent next year; India’s by 7 per cent and 7.1 per cent; Indonesia by 5.2 per cent this year and next; Vietnam by 7.8 per cent and 7.6 per cent. In terms of inflation, the most worrying picture is that of Pakistan (from 7.1 per cent this year to 8.3 per cent next year) and Bangladesh (from 8.7 per cent to 9 per cent). Estimates for Turkey are falling, from 31.5 per cent in 2026 to 23.5 per cent in 2027.
The ongoing conflict in the Middle East – as the document states – and the new escalation of Russia’s war in Ukraine have kept energy prices high and volatile. These two factors will be compounded by a particularly intense El Niño, which is set to pose a further challenge to the growth prospects of a region that is particularly exposed to the effects of climate change. The ADB report does not cover developed Asian economies such as Japan, South Korea, Singapore and Taiwan.
“The risks remain skewed to the downside,” explains Albert Park, the ADB’s chief economist, in the report. “A further escalation of conflicts or more severe-than-expected El Niño effects could slow economic growth and push inflation to higher levels.” Climate anomalies are already putting harvests at risk in numerous countries, from India to Thailand, whilst reduced rainfall is cutting hydroelectric power generation and hampering maritime traffic in strategic waterways such as the Panama Canal.
In India, the monsoon season is drawing to a close with a rainfall deficit of between 10 and 15 per cent, a worrying figure for a country where more than 46 per cent of the workforce is employed in an agricultural sector already under strain due to rising fertiliser prices caused by the war in the Middle East.
