MANILA, Dec 10 (Reuters) – Strong demand for products from the region’s high-tech economies and India’s faster-than-expected growth have improved the outlook for developing Asia and the Pacific for this year and the next, the Asian Development Bank said on Wednesday.
Growth in 2025 is now projected at 5.1%, up from the 4.8% forecast in September, the ADB said in an update to its Asian Development Outlook, and higher than the 4.9% projection it made when it first released the report in April.
It also raised its 2026 growth forecast for the region to 4.6% from 4.5%, citing reduced trade uncertainty after several U.S. deals.
The region consists of 46 economies ranging from China and India to Georgia and Samoa, but excluding Japan, Australia and New Zealand.
“While regional growth is expected to moderate next year, export strength, underpinned by the upturn in the AI and electronics cycle, will help to sustain economic activity, alongside lower trade uncertainty,” the ADB said.
“Possible re-escalations of tariffs and trade policy uncertainty, and intensification of financial market volatility, remain significant downside risks for the outlook,” it added.
Subregional prospects have also improved, with South Asia now expected to grow 6.5% this year, up from a previous forecast of 5.9%, with India beating forecasts to grow 8.2% in its fiscal second quarter ending in September.
Southeast Asia is expected to expand 4.5% this year, up from 4.3% previously, with growth to inch up to 4.4% in 2026, but the ADB said risks from global uncertainties, climate-related disruptions, and domestic political developments still remain.
Recent events underscore these vulnerabilities, with severe flooding across Indonesia, Thailand, and Malaysia in late November killing hundreds and displaced millions.
Meanwhile, fighting between Thailand and Cambodia has also reignited, with renewed border clashes and airstrikes this week, derailing a fragile ceasefire brokered by U.S. President Donald Trump after five days of warfare in July.
China’s 2025 outlook edged up to 4.8% from 4.7%, still below Beijing’s target of 5.0%, while the 2026 projection remained unchanged at 4.3%, reflecting the continued weakness in the country’s property market.
“The persistent property sector downturn continued to weigh on activity, with a sharper decline in property investment pulling fixed asset investment down and slowing infrastructure and manufacturing investment,” the ADB said.
Inflation is forecast to ease to 1.6 in 2025 from 1.7% projected in September, before rising to 2.1% in 2026, the ADB said.
GDP GROWTH 2024 2025 2025 2025 2026 2026 2026
JULY SEPT DEC JULY SEPT DEC
Caucasus and 5.8 5.5 5.5 5.8 5.1 4.9 5.0
Central Asia
East Asia 4.7 4.3 4.4 4.6 4.0 3.9 4.1
China 5.0 4.7 4.7 4.8 4.3 4.3 4.3
South Asia 5.9 5.9 5.9 6.5 6.2 6.0 6.0
India 6.5 6.5 6.5 7.2 6.7 6.5 6.5
Southeast 4.8 4.2 4.3 4.5 4.3 4.3 4.4
Asia
Indonesia 5.0 5.0 4.9 5.0 5.1 5.0 5.1
Malaysia 5.1 4.3 4.3 4.5 4.2 4.2 4.3
Myanmar -0.7 n/a -3.0 n/a n/a 2.0 n/a
Philippines 5.7 5.6 5.6 5.0 5.8 5.7 5.3
Singapore 4.4 1.6 2.5 4.1 1.5 1.4 2.1
Thailand 2.5 1.8 2.0 2.0 1.6 1.6 1.6
Vietnam 7.1 6.3 6.7 7.4 6.0 6.0 6.4
The Pacific 3.8 3.9 4.1 4.1 3.5 3.4 3.4
Developing 5.1 4.7 4.8 5.1 4.6 4.5 4.6
Asia
INFLATION
Caucasus and 6.8 7.8 7.7 8.0 6.7 6.6 7.1
Central Asia
East Asia 0.5 0.4 0.3 0.3 0.6 0.6 0.6
China 0.2 0.2 0.0 0.0 0.4 0.4 0.4
South Asia 6.5 4.4 3.7 3.3 4.5 4.7 4.7
India 4.6 3.8 3.1 2.6 4.0 4.2 4.2
Southeast 3.0 2.6 2.5 2.4 2.7 2.7 2.8
Asia
Indonesia 2.3 1.5 1.7 1.7 2.0 2.0 2.5
Malaysia 1.8 2.4 1.8 1.6 2.4 2.2 2.2
Myanmar 27.8 n/a 30.0 n/a n/a 23.0 n/a
Philippines 3.2 2.2 1.8 1.8 3.0 3.0 3.0
Singapore 2.4 1.0 1.0 1.0 1.2 1.2 1.2
Thailand 0.4 0.5 0.5 0.0 0.8 0.8 0.5
Vietnam 3.7 3.9 3.9 3.9 3.8 3.8 3.8
The Pacific 1.9 3.4 3.0 2.5 3.7 3.4 3.4
Developing 2.6 2.0 1.7 1.6 2.1 2.1 2.1
Asia
(Reporting by Karen Lema; Editing by David Stanway)
