ISLAMABAD, Sep 23 (APP):Economic growth in developing Asia and the Pacific is projected to moderate to 5% in 2026 from 5.5% in 2025, before edging up to 5.1% in 2027, with the 2026 forecast revised up by 0.1 percentage points, the Asian Development Bank (ADB) said in its latest report. In the Asian Development Outlook (ADO) September 2026, released on Wednesday, ADB trimmed its regional inflation forecast for 2026 to …
Developing Asia-Pacific growth to slow, remain resilient: ADB
ISLAMABAD, Sep 23 (APP):Economic growth in developing Asia and the Pacific is projected to moderate to 5% in 2026 from 5.5% in 2025, before edging up to 5.1% in 2027, with the 2026 forecast revised up by 0.1 percentage points, the Asian Development Bank (ADB) said in its latest report.
In the Asian Development Outlook (ADO) September 2026, released on Wednesday, ADB trimmed its regional inflation forecast for 2026 to 4.2% from 4.3% in July, as price stabilization measures partly offset the impact of persistently high energy prices.
The inflation forecast for 2027 is revised up slightly to 3.5%, compared with 3.4% in July. The revised inflation projections for both years remain above the 3% recorded in 2025.
“The region has remained resilient, but the risks are growing,” said ADB President Masato Kanda.
“A strengthening El Niño with drier conditions means smaller harvests and reduced hydropower, pushing food and energy prices higher, and hitting the most vulnerable the hardest. The prolonged energy crisis and renewed risks in financial markets make it even more important for governments to prepare and protect the people most exposed. ADB is strongly supporting such efforts,” Kanda added.
Strong investment, government stimulus, and robust technology exports driven by the global artificial intelligence (AI) investment cycle are supporting growth, even as geopolitical tensions and a strengthening El Niño push up energy and food prices.
ADO September 2026 identifies two main risks to the region’s growth and inflation outlook. The first is escalating conflict, particularly a broadening of the Middle East conflict and an intensification of Russia’s war in Ukraine, which could keep global energy prices elevated and volatile, and spill over to other commodities.
The second is a very strong El Niño, forecast to persist through the first quarter of 2027, which could raise energy demand and lower agricultural production, pushing up fuel and food prices. A sharp correction in AI-related equity valuations, tightening financial conditions, and renewed trade policy uncertainty pose further downside risks.
Sub-regional growth prospects are mixed as stronger-than-expected performance in the first half of 2026 has slightly improved the outlook for developing Southeast Asia, with the 2026 and 2027 forecasts now at 4.7% and 4.9%, up from 4.6% and 4.8%, respectively. The outlook is unchanged for developing East Asia, including the People’s Republic of China.
For South Asia, the growth forecast for this year is revised up to 6.4% from 6% in July, driven by strong public investment and firm export growth in India.
The 2027 projection is lowered by 0.2 percentage points to 6.5%, reflecting lower forecasts for Afghanistan, Bangladesh, India, and Nepal amid trade, energy, and weather-related shocks.
For the Caucasus and Central and West Asia, forecasts are revised down by 0.1 percentage points for both years, to 3.7% and 4.1%, mainly on weaker-than-expected external demand, particularly in Türkiye.
Economies in the Pacific face the largest downward revisions, with projections for both years cut by 0.3 percentage points, to 3% and 2.9%, on prolonged energy market disruptions and the expected effects of El Niño on mining and agriculture.
