The Asian Development Bank (ADB) is trimming its growth outlook for developing Asia and the Pacific by 0.1 and 0.2 percentage points for this year and next, respectively, amid the emergence of a new global trade environment, shaped by tariffs and updated trade agreements, DKNews.kz reports.
Economies in the region are projected to grow by 4.8% this year and 4.5% next year, according to Asian Development Outlook (ADO) September 2025, released today. This compares with April forecasts of 4.9% and 4.7%, respectively.
Higher tariffs imposed by the United States (US) and elevated trade uncertainty are expected to weigh on the region’s growth. Inflation will continue to ease to 1.7% this year amid lower prices for food and energy, before increasing modestly to 2.1% next year as food prices normalize.
“US tariffs have settled at historically high rates and global trade uncertainty remains at elevated levels,” said ADB Chief Economist Albert Park. “Growth in developing Asia and the Pacific has remained resilient this year thanks to strong exports and robust domestic demand, but the worsened external environment is impacting the outlook. Amid the new global trade environment, it’s crucial for governments to continue promoting sound macroeconomic management, openness, and further regional integration.”
Growth forecasts for the People’s Republic of China (PRC) remain unchanged, as policy support is expected to cushion the impact of higher tariffs and continued weakness in the property market. The PRC’s economy is projected to expand by 4.7% this year and 4.3% next year.
The steep US tariffs levied on Indian exports starting in August are expected to weigh on growth. ADB is now forecasting India’s economy to grow by 6.5% for both 2025 and 2026, compared with the April forecasts of 6.7% this year and 6.8% next year.
Economies in Southeast Asia are seeing the largest downgrades to growth forecasts amid weaker global demand and elevated trade uncertainty. Growth in the subregion is now projected at 4.3% for 2025, and the same for 2026—down 0.4 percentage points for each year compared with April’s forecasts.
The growth forecast for Caucasus and Central Asia is slightly upgraded for this year to 5.5%, while the projection for next year is trimmed by 0.1 percentage points to 4.9%, primarily due to lower oil and gas production in some countries in the subregion.
Kazakhstan’s economic outlook has been revised upward to 5.3% in 2025 and 4.3% in 2026 from 4.9% and 4.1% projected in April. The revision is driven by continued government-led infrastructure investment and increasing resources extraction. GDP growth in the first half of 2025 reached 6.2% year-on-year – the highest in a decade – supported by robust expansion in construction, manufacturing, services and agriculture. Inflation projections have also been raised due to utility price hikes and currency depreciation, with average inflation expected to reach 10.5% in 2025 and 8.4% in 2026. Despite strong growth, imports are projected to outpace exports, resulting in a sustained current account deficit. The state budget deficit is forecast to narrow gradually as higher tax revenues offset rising social and infrastructure spending. The government’s infrastructure modernization program and new tax code are expected to further support economic resilience.
For economies in the Pacific, the forecast has been raised 0.2 percentage points to 4.1% this year amid stronger mining output, while the subregion’s growth projection for next year is lowered to 3.4%—from 3.6% in April—due to expectations of weaker resource output and lower commodity exports.
The main risks to developing Asia and the Pacific’s outlook include continuing uncertainty around US trade policy, particularly regarding possible sectoral tariffs on semiconductors and pharmaceuticals, as well as unresolved US–PRC trade negotiations. Ongoing geopolitical tensions, potential further deterioration in the PRC’s property market, and possible financial market volatility could also affect the region’s outlook.
ADB is a leading multilateral development bank supporting inclusive, resilient, and sustainable growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.
