Revised forecast reveals decreased economic growth for Asia-Pacific region by ADB
The Asian Development Bank (ADB) has issued a cautious outlook for developing economies in Asia and the Pacific, lowering its growth forecasts for both 2025 and 2026. According to the bank's July 2025 report, Asian Development Outlook, the region's economies are expected to grow by 4.7% in 2025 and 4.6% in 2026, slightly down from an earlier projection of 4.9% for 2025 and 4.7% for 2026 [2][4][5].
The downward revision is primarily driven by higher US tariffs, global trade uncertainties, weaker exports, and softer domestic demand [2][4][5]. Key factors influencing this outlook include trade risks, geopolitical tensions, China’s property market, and domestic economic weaknesses [1][2][4].
Trade risks are evident as escalating US tariffs and uncertain global demand are putting pressure on exports across the region. Geopolitical tensions, such as conflicts and instability in the Middle East and worsening tensions in some areas, threaten supply chains and energy prices. The prolonged and deteriorating property sector in China adds to the downside risks, while some economies face slower consumer spending and investment slowdowns [1][2][4].
Country-specific highlights include India, which remains the fastest-growing major economy with a forecast of 6.5% in 2025 and 6.7% in 2026, supported by strong public investment, rural demand, and the services sector. China is expected to grow 4.7%, with government stimulus offsetting domestic demand softness [2][4]. Vietnam is forecasted at 6.3% growth, but its outlook is also impacted by higher tariffs and trade uncertainty.
Economies in Southeast Asia, including Malaysia, Singapore, and Thailand, face notable downgrades due to weak external demand and softening tourism and consumer activity. Central Asia and the Caucasus show some resilience, with a revised upward growth forecast to 5.5% in 2025, helped by stronger oil production and investment spending [1][3][5].
ADB Chief Economist Albert Park emphasized the need for these economies to strengthen fundamentals, promote open trade, and enhance regional cooperation to mitigate the impact of the challenging external environment [2][4]. Inflation in developing Asia and the Pacific is projected to continue slowing, with regional inflation forecasted at 2.0% for 2025 and 2.1% for 2026 [2][4][5].
This press release is related to topics such as Policy & Finance and encourages content publication. The regions covered in the press release are Asia Pacific, China, Global, Southeast Asia, and the United States. The tags associated with the press release include economy, investment, supply chain, trade, and multilateral development bank.
- The cautious outlook released by the Asian Development Bank (ADB) for developing economies in Asia and the Pacific has been influenced by various factors such as trade risks, geopolitical tensions, China's property market, and domestic economic weaknesses, which are linked to policy and legislation, finance, and general news.
- In light of the challenging external environment, the ADB's Chief Economist, Albert Park, emphasized the importance of these economies strengthening their fundamentals, promoting open trade, and enhancing regional cooperation, which are steps directly related to politics and business.
