Introduction
ADB Cuts Growth Forecasts for Developing Asia and Pacific Amid Trade Uncertainty.The Asian Development Bank (ADB) has revised its economic outlook for developing countries in Asia and the Pacific, citing a decline in export demand and rising global trade tensions. In its latest Asian Development Outlook (ADO) released on July 23, 2025, the ADB now expects slower growth this year and next due to increasing uncertainties in global trade and domestic economic pressures.
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Slower Growth Expected for Developing Asia and Pacific
According to the new ADB report, the growth forecast for 2025 in developing Asia and the Pacific has been reduced to 4.7%, a 0.2 percentage point decrease from April’s projection. The expected growth for 2026 is now 4.6%, slightly down from the earlier estimate of 4.7%.
The slowdown is mainly due to weaker exports caused by higher tariffs from the United States, growing uncertainty in global trade, and sluggish domestic demand across the region.
External and Internal Risks Threaten Recovery
ADB warns that more U.S. tariff hikes or worsening trade disputes could further harm the region’s economies. Other risks include:
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Geopolitical tensions that may affect global supply chains
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Rising energy prices due to international conflicts
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A possible decline in China’s property market, which could impact other regional economies
ADB’s Chief Economist Albert Park noted, “The region is facing tough global conditions. To protect growth and jobs, countries must strengthen their economic systems and keep markets open.”
China and India: Mixed Outlook for the Two Giants
China (People’s Republic of China – PRC)
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2025 growth forecast: 4.7% (unchanged from April)
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2026 growth forecast: 4.3% (unchanged)
China, Asia’s largest economy, is expected to maintain its pace due to policy efforts that support consumer spending and manufacturing. These policies may help balance the ongoing struggles in the real estate sector and slowing exports.
India
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2025 growth forecast: 6.5% (down 0.2 points from April)
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2026 growth forecast: 6.7% (down 0.1 points)
India is facing the impact of uncertain global trade and higher U.S. tariffs, which are affecting exports and foreign investments. Despite this, the country remains one of the fastest-growing economies in the region.
Southeast Asia Faces the Biggest Hit
The ADB states that Southeast Asian economies are likely to be the most affected by the worsening global trade environment.
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2025 growth forecast: 4.2% (down 0.5 points)
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2026 growth forecast: 4.3% (also down 0.5 points)
Countries like Vietnam, Indonesia, Malaysia, and Thailand are expected to face slower export growth and reduced investor confidence due to uncertainty in global trade conditions.
Caucasus and Central Asia See Upward Revisions
In contrast to the rest of the region, Caucasus and Central Asian countries are seeing an improvement in their economic forecasts:
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2025 growth forecast: 5.5% (up 0.1 points)
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2026 growth forecast: 5.1% (up 0.1 points)
This is largely due to an expected rise in oil production, which boosts government revenues and strengthens domestic economies in these nations.
Inflation Trends Show Signs of Easing
While growth may be slowing, inflation is also coming down in many parts of developing Asia and the Pacific. Lower oil prices and strong agricultural output are helping to reduce food and energy costs.
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2025 inflation forecast: 2.0% (down from 2.3%)
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2026 inflation forecast: 2.1% (down from 2.2%)
This is a positive sign for consumers and policy makers, as lower inflation can help keep interest rates stable and reduce the cost of living.
ADB’s Role in the Region
Founded in 1966, the Asian Development Bank plays a major role in helping the Asia-Pacific region grow in a sustainable and inclusive way. With 69 member countries (50 from the region), ADB works on:
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Funding infrastructure projects
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Supporting education and health sectors
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Promoting green energy
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Fighting poverty
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Helping countries manage climate risks
ADB continues to encourage countries to focus on long-term investment, stronger institutions, and regional cooperation to weather global challenges.
Table: Updated ADB Growth and Inflation Forecasts
| Region or Country | Growth 2025 | Growth 2026 | Inflation 2025 | Inflation 2026 |
|---|---|---|---|---|
| Developing Asia & Pacific | 4.7% | 4.6% | 2.0% | 2.1% |
| China (PRC) | 4.7% | 4.3% | — | — |
| India | 6.5% | 6.7% | — | — |
| Southeast Asia | 4.2% | 4.3% | — | — |
| Caucasus & Central Asia | 5.5% | 5.1% | — | — |
SEO-Focused Summary
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Why ADB lowered its growth outlook
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How U.S. tariffs are affecting exports
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Regional impacts on Southeast Asia, China, and India
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Positive outlook for Central Asia
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Trends in regional inflation
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ADB’s role in long-term development
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Conclusion
The economic outlook for developing Asia and the Pacific is less positive than earlier expected, mainly due to global trade uncertainties, geopolitical risks, and domestic challenges. While China and India are still growing, their momentum has slowed. Southeast Asia faces particular headwinds, while Central Asia benefits from energy exports.
However, with careful planning, sound policy choices, and continued regional cooperation, ADB believes that the region can still achieve resilient and inclusive growth in the coming years.
