ADB cuts Asia 2026 growth forecast
Analysis based on 7 articles · First reported Jul 09, 2026 · Last updated Jul 09, 2026
The downgrade reflects persistent headwinds from energy disruptions and inflation, which may dampen investor sentiment toward emerging Asian markets. Higher borrowing costs and fiscal deficits could pressure sovereign bonds, while rising fertilizer prices threaten agricultural output and food security.
The Asian Development Bank (ADB) lowered its 2026 growth forecast for developing Asia-Pacific economies to 4.9% from 5.5% in 2025, a 0.2 percentage point reduction from April projections. The downgrade is attributed to prolonged disruptions in global energy markets due to the Middle East conflict, which have also impacted fertilizers, commodity prices, and supply chains. Regional inflation is forecast at 4.3% for 2026, up 0.7 percentage points from April. India's growth forecast was revised down to 6.6% for 2026, while China's forecast remained unchanged at 4.6%. Growth projections for Southeast Asia and the Pacific were also trimmed. The 2027 growth forecast is maintained at 5.1%, with inflation expected to moderate to 3.4%. ADB Chief Economist Albert Park noted that durable implementation of a June framework agreement could normalize energy markets, but risks remain.
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