MANILA, PHILIPPINES / MENA Newswire / – The Asian Development Bank cut its 2026 growth forecast for developing Asia and the Pacific to 4.9%. The bank cited prolonged global energy disruption and softer demand in parts of the region. The projection stands below the 5.1% estimate issued in April. It also marks a slowdown from 5.5% growth in 2025. ADB kept its 2027 regional forecast at 5.1%. The update covers developing economies across Asia and the Pacific.
ADB said the global energy crisis has raised costs for households, businesses and governments. Higher fuel prices have increased transport expenses and production costs. The pressure has also reached fertilizers and other commodities. Those costs affect trade, food systems and supply chains across energy-importing economies. The bank said the Middle East conflict remains a key factor behind the disruption. It also noted that demand conditions differ widely across the region.
The downgrade reflects a weaker regional path after strong growth last year. Developing Asia and the Pacific remains one of the world’s faster-growing regions. Still, the forecast shows less momentum than ADB expected earlier in 2026. The bank’s latest Asian Development Outlook update also raised the inflation forecast. Headline inflation for the region is now projected at 4.3% in 2026. It stood at 3.0% in 2025.
Energy disruption weighs on growth
ADB said most subregions now face lower growth projections than in April. East Asia was the main exception in the latest update. The bank projected East Asia growth at 4.6% in 2026. South Asia is expected to grow 6.0%, keeping it the fastest-growing subregion. Southeast Asia’s growth forecast also stands at 4.6%. The figures show a mixed regional economy, with stronger domestic demand in some markets offset by energy pressures elsewhere.
China’s growth forecast was unchanged at 4.6% for 2026 and 4.5% for 2027. The Asian Development Bank said the outlook for developing East Asia remained steadier than other subregions. India’s growth forecast was lowered to 6.6% for 2026. The 2027 forecast for India was kept at 7.3%. Higher energy costs, weaker purchasing power and transport expenses shaped the revised outlook for major energy-importing economies.
Inflation outlook moves higher
ADB raised its 2026 inflation projection as energy and related costs moved through the economy. The bank forecast regional inflation at 3.4% in 2027. Higher energy prices usually reach consumers through fuel, transport and electricity bills. They also affect firms through logistics, imported inputs and operating costs. ADB’s update linked the inflation shift to the same disruption that lowered the growth outlook. Food and commodity costs remain important parts of the regional price picture.
The report places the Asia and Pacific growth forecast in a fragile global setting. ADB said energy markets, supply chains and financing conditions remain central to the region’s near-term performance. The bank also highlighted the importance of domestic demand, trade flows and price stability. The revised outlook gives policymakers and investors a clearer view of 2026 conditions. It shows continued growth, but at a slower pace than expected earlier this year.