India is set to outpace the broader Asian region, and China, even as growth across developing Asia and the Pacific is projected to slow down over the next two years amid geopolitical headwinds, according to a report released by Asian Development Bank (ADB) on Friday.
According to the ADB analysis, economic growth in developing Asia and the Pacific is projected to ease to 5.1 per cent in 2026 and 2027, down from 5.4 per cent last year, weighed by geopolitical tensions and persistent trade uncertainty.
In contrast, India’s growth is forecast to remain relatively robust at 6.9 per cent in 2026, before accelerating to 7.3 per cent in 2027, supported by resilient domestic consumption.
"Most economies in developing Asia and the Pacific will see their growth outlook worsen this year and in 2027," the report noted, as it highlighted India’s relative strength.
Moreover, the ADB said the region is entering this uncertain global environment from a position of strength, backed by robust domestic demand, steady labour markets and higher public infrastructure spending. However, risks remain tilted to the downside.
"Growth in the People’s Republic of China (PRC) is projected to decline to 4.6 per cent this year and 4.5 per cent next year, from 5 per cent last year, with continued property market weakness and slower export expansion expected to weigh on activity," the report said.
A prolonged conflict in the Middle East could push up energy and food prices and tighten financial conditions, posing the biggest threat to the region’s outlook, ADB Chief Economist Albert Park said.
The report also flagged that continued volatility in global trade policies could further weigh on growth prospects across the region.
Despite these headwinds, resilient private consumption and strong demand for artificial intelligence-related goods are expected to provide some support to regional economies.
In addition, oil prices are projected to stay elevated in the near term but would gradually stabilise if geopolitical tensions eased.
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