Key facts
- The Asian Development Bank (ADB) has revised its 2026 growth forecast for developing Asia and the Pacific to 4.9%, down from 5.1%.
- The ADB also raised its 2027 growth forecast to 5.1%, matching its April estimate.
- The revised forecast for 2026 is an improvement from the 4.7% estimate issued in late April.
- The Middle East conflict has led to prolonged disruption to energy and supply chains, raising production costs and dampening economic activity.
- Significant downside risks include renewed escalation of the conflict, prolonged energy market uncertainty, tighter global financial conditions, re-pricing of AI-related stocks, and a deeper property downturn in China.
- Inflation in the region is expected to quicken to 4.6% this year, compared with the ADB's 3.6% forecast in April.
The Asian Development Bank (ADB) has revised its growth outlook for developing Asia and the Pacific, projecting 4.9% expansion for 2026, a slight improvement from its late April estimate but below the 5.1% forecast from April. The 2027 forecast was raised to 5.1%. The ADB cited prolonged disruptions to energy and supply chains from the Middle East conflict as key factors, alongside tighter global financial conditions and China's property downturn. Inflation in the region is expected to quicken to 4.6% this year before easing to 3.4% in 2027. The bank also noted significant downside risks, including potential conflict escalation and AI stock re-pricing.