ADB lifts India’s 2025–26 growth forecast to 7.2%
Asian Development Bank
The Asian Development Bank (ADB) has raised India’s growth forecast for 2025–26 by 0.7 percentage points—from 6.5 per cent to 7.2 per cent—days after the country posted strong July–September quarter numbers and signs of a stronger fiscal outlook.
ADB said India’s upgraded projection reflects a more robust third-quarter expansion, aided by tax cuts that have supported consumption. The forecast for 2026 remains unchanged at 6.5 per cent.
The multilateral lender on Wednesday also revised upward its growth outlook for developing Asia and the Pacific for both 2025 and 2026, citing stronger-than-expected exports and reduced trade uncertainty following recent trade agreements with the United States.
Resilient exports—particularly semiconductors and other technology products—along with moderating inflation and stable financial conditions have strengthened the region’s overall growth prospects, the ADB said.
Boosted by India’s improved performance, the region is now expected to grow by 5.1 per cent in 2025, up from the 4.8 per cent forecast in September, according to the Asian Development Outlook (ADO) December 2025 released today. The 2026 growth outlook has also been revised up by 0.1 percentage points to 4.6 per cent.
“Asia and the Pacific’s solid economic fundamentals are underpinning robust export performance and steady growth, despite a global trade environment clouded by historic levels of uncertainty over the past year,” ADB Chief Economist Albert Park said.
“Trade agreements have partly eased that uncertainty, but external and other challenges could still weigh on the outlook. Governments must continue to foster open trade and investment to sustain resilience and growth.”
Risks to the regional outlook include renewed trade tensions, financial market volatility, geopolitical pressures, and any sharper-than-expected deterioration in China’s property market.
Inflation in developing Asia and the Pacific is expected to ease slightly to 1.6 per cent this year, compared with the earlier 1.7 per cent projection—driven mainly by lower-than-anticipated food inflation in India. The region’s inflation forecast for 2026 remains unchanged at 2.1 per cent.
