Islamabad (Commerce Desk) — The Asian Development Bank has lowered its economic growth forecast for developing Asia and Pacific economies for 2026, revising it to 4.9 percent, compared with the region’s growth rate of 5.5 percent in 2025.
According to the ADB, the new forecast is 0.2 percentage points lower than the estimate released in April.
According to details, the Asian Development Bank’s July 2026 report, the Asian Development Outlook, stated that prolonged disruptions in global energy markets due to the Middle East conflict have affected the region’s economic conditions more than expected.
The report has maintained the economic growth forecast for 2027 at 5.1 percent, as expectations remain that economic activity will gradually improve with a reduction in current pressures.
According to the ADB, despite the framework agreement reached in June, it may take time for the disruptions in global energy markets to fully end. Besides energy, the effects of this situation are also expected to continue on fertilizers, raw materials, and global supply systems, which could increase inflationary pressures.
The report stated that inflation in developing Asia is expected to remain at 4.3 percent during 2026, compared with 3 percent in 2025. The new inflation forecast has been increased by 0.7 percentage points compared with the April estimates; however, the inflation forecast for 2027 has been kept unchanged at 3.4 percent.
ADB Chief Economist Albert Park said that if the framework agreement is implemented effectively and consistently, it could help restore normal conditions in global energy markets. However, uncertainty remains regarding the pace of this process, and several major risks continue to exist.
He said that the economic foundations of developing Asia and the Pacific remain strong, but due to continued pressures caused by conflicts, governments will need to adopt balanced policies between promoting economic growth and controlling inflation.