Asian Development Bank
This edition projects that growth in developing Asia and the Pacific will moderate from 5.5% in 2025 to 5% in 2026 before edging up to 5.1% in 2027. The 2026 forecast is 0.1 percentage points higher than the previous outlook in July. Steady domestic demand, government stimulus, and strong technology exports driven by the global artificial intelligence investment cycle will support activity, helping offset the impact of higher trade and energy costs. The inflation forecast is trimmed to 4.2% for 2026, as broad and fiscally costly subsidies cushion higher energy prices, before easing to 3.5% in 2027. Downside risks include further geopolitical escalation, a worse-than-expected El Niño, tighter financial conditions, and renewed trade policy uncertainty. The report includes an analytical chapter on how elevated public and private debt may constrain monetary policy, and a special topic on the potential impacts for Asia and the Pacific of a very strong El Niño.
