ASIATODAY.ID, MANILA — The Asian Development Bank (ADB) has delivered a major surprise to global markets by sharply upgrading its growth outlook for developing Asia and the Pacific.
The revision comes at a time when the world is still grappling with trade tensions, uneven recoveries, and persistent geopolitical risks—yet the region continues to outperform expectations.
In its new Asian Development Outlook (ADO) December 2025, ADB highlights stronger-than-expected exports, easing inflation, and improving financial conditions as the primary drivers behind the upward revision.
Asia-Pacific Powers Ahead: Growth Beats Forecasts
ADB now projects the region to grow 5.1% in 2025, rising from the earlier forecast of 4.8%. The 2026 outlook has also been nudged upward to 4.6%, reinforcing Asia-Pacific’s role as the engine of global economic momentum.
“Asia and the Pacific’s solid economic fundamentals are supporting strong export performance and steady growth despite unprecedented global uncertainty,” said ADB Chief Economist Albert Park on December 10, 2025.
He added that while recent trade agreements with the United States have reduced some uncertainty, risks remain and governments must continue fostering open trade and investment.
India and China Lead the Upswing
India sees the most significant upgrade, with its 2025 forecast jumping from 6.5% to 7.2%, fueled by stronger third-quarter growth and consumer demand boosted by tax cuts.
The People’s Republic of China (PRC) receives a modest upward revision to 4.8%, supported by resilient exports and ongoing fiscal stimulus. Its 2026 forecast remains unchanged at 4.3%, but concerns over the property market continue to cast a shadow.
Strong Momentum Across the Region
Southeast Asia: Growth upgraded to 4.5%, reflecting robust performance in Indonesia, Malaysia, Singapore, and Viet Nam during Q3.
The Caucasus and Central Asia: Projection lifted to 5.8%, driven by strong public investment, rising remittances, and firm domestic demand.
The Pacific: Forecasts remain stable at 4.1% in 2025 and 3.4% in 2026.
Inflation Eases, Strengthening the Recovery
Regional inflation is expected to decline to 1.6%—slightly lower than the previous estimate of 1.7%—thanks largely to lower-than-anticipated food inflation in India. For 2026, inflation is projected to remain steady at 2.1%.
But Risks Remain
ADB warns that several threats could derail the region’s strong momentum, including: renewed trade tensions, financial market volatility, escalating geopolitical pressures, and a deeper-than-expected downturn in China’s property sector.
With this upgraded outlook, Asia and the Pacific continue to reinforce their status as the world’s most dynamic economic bloc—proving once again that resilience, export strength, and policy discipline remain the region’s strongest assets. (AT Network)
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