ADB Trims Developing Asia’s Growth Forecast Amid Rising Trade Pressures
The Asian Development Bank (ADB), in its latest Asian Development Outlook (ADO) July 2025 update, has scaled back its economic growth forecast for developing Asia. The region is now expected to expand by 4.7% in 2025 and 4.6% in 2026, slightly lower than the April projections of 4.9% for both years. This downward revision stems largely from escalating global trade tensions and higher tariffs affecting economic momentum.
A closer look reveals varying trends across subregions. Developing Asia, excluding China, is now projected to grow by 5.0% in 2025 and 4.9% in 2026, also down slightly from previous estimates. Meanwhile, East Asia, which includes China, South Korea, Hong Kong, and Taipei, is expected to grow more modestly. China’s growth outlook has been revised to 4.7% for 2025 and 4.3% for 2026, indicating a continued moderation in economic activity.
South Asia, however, remains a bright spot. The region is forecast to grow by 5.9% in 2025 and 6.2% in 2026, with India maintaining strong momentum at 6.7% growth for both years. Southeast Asia is also poised for steady gains, with anticipated growth of 4.7% in 2025 and 5.1% in 2026, driven by economies like Indonesia, Malaysia, the Philippines, and Vietnam.
On inflation, the report notes a slight upward revision. Average inflation in developing Asia is now expected to reach 2.3% in 2025 and 2.2% in 2026, reflecting lingering price pressures, especially in parts of Central Asia such as Kazakhstan and Georgia.
The ADB’s updated outlook emphasizes the need for policy resilience as the region continues to face global uncertainties. The focus remains on sustainable growth, inflation control, and long-term stability amid shifting trade dynamics.
