The Asian Development Bank (ADB) has forecast a slowdown in economic growth for developing countries in South Asia over the next two years.
In its latest report on developing economies in Asia and the Pacific, ADB revised the region’s projected growth rate for the current year from 4.9% to 4.7%, while projecting 4.6% growth for next year.
For Pakistan, the report predicts a decline in inflation this year, with the economic growth rate expected to remain at 3%. The fall in inflation is attributed to lower food and commodity prices. However, inflation in Pakistan is expected to remain at 5.8% for fiscal year 2025–26.
The report also highlights global uncertainties, especially related to U.S. tariffs and international trade, which may dampen growth. ADB warns that additional tariffs imposed by the U.S. could impact Asian economies, and global trade uncertainty could lead to reduced exports.
In South Asia, economic growth is expected to reach 6.2% by 2026, with inflation likely to be around 4.5%. The region is projected to be among the hardest hit by trade pressures.
Growth in Southeast Asia is expected to slow to 4.2%, while increased oil production is likely to boost Central Asia’s economic performance. The trend of declining inflation is expected to continue.
China’s growth is forecast to hold steady at 4.7%, while India’s growth is projected to reach 6.5% despite a slight decline. However, India’s exports may also be affected by U.S. tariffs, and China faces economic challenges due to weaknesses in its real estate sector.
According to the ADB statement, inflation is projected to be 2.0% in 2025 and 2.1% in 2026 across the region.
Experts believe that policy reforms and open trade are key to sustainable growth. ADB has recommended that regional economies focus on strengthening their economic foundations.
