ADB Predicts Economic Growth in Asia-Pacific to Slow Down
The Asian Development Bank (ADB) estimates that economic growth in developing countries in the Asia and Pacific region will slow to 5.1 per cent in 2026 and 2027, compared to 5.4 per cent last year.
This was stated by ADB Chief Economist Albert Park in a written statement. He said the prediction of the slowdown is based on the impact of conflicts in the Middle East and the ongoing trade uncertainties. Meanwhile, regional inflation is projected to rise to 3.6 per cent in 2026 and 3.4 per cent in 2027, from 3 per cent last year.
“This forecast uses a number of assumptions finalised on 10 March 2026 in conditions of high uncertainty, which is a projection of an early stabilisation scenario related to the conflict in the Middle East. Developments so far indicate a greater chance of more persistent disruptions,” said Park in the written statement, quoted from Antara.
ADB views the Asia and Pacific region as facing a challenging and uncertain global environment from a relatively strong position. This is because domestic demand remains strong, labour markets are stable, and public infrastructure spending is higher, supporting resilience.
The April 2026 Asian Development Outlook (ADO) also states that prolonged conflict in the Middle East represents the greatest risk to the Asia-Pacific region’s projections because the situation could lead to higher energy and food prices for longer, as well as tighter financial conditions.
In addition, ADB assesses that the re-emergence of trade policy uncertainties adds to the risks. Therefore, governments in various countries need to pursue appropriate macroeconomic policies to maintain growth and contain inflation through targeted policies to protect vulnerable households.
The April 2026 ADO also includes a section examining the impact of the conflict on various economies in the region based on a number of alternative scenarios. Prolonged conflict and escalation in the Middle East are assessed to impact economic activity through several channels, including price increases, shipping disruptions, and financial volatility.
Most developing country economies in the Asia and Pacific region are experiencing downward revisions to growth projections for 2026 and 2027, although household spending remains resilient and demand for goods related to artificial intelligence (AI) remains solid.
Growth in the People’s Republic of China is projected to decline to 4.6 per cent in 2026 and 4.5 per cent in 2027, from 5 per cent in 2025, due to the ongoing decline in the property market and slowing export growth, which is holding back economic activity.
Meanwhile, ADB estimates growth in India to slow to 6.9 per cent this year from 7.6 per cent last year, before rebounding to 7.3 per cent next year. This is underpinned by strong domestic consumption support.
ADB also predicts the Pacific economy to decline from 4.2 per cent in 2025 to 3.4 per cent in 2026 and 3.2 per cent in 2027. Oil prices are projected to remain high in the near term but could gradually decline if geopolitical tensions ease. “The recent sharp rise in energy prices and potential disruptions in fertiliser markets related to the Middle East conflict could exert inflationary pressure on global food prices,” said Park.