MANILA, 24th September, 2026 (WAM) -- Economic growth in developing Asia and the Pacific is projected to moderate to 5% in 2026 from 5.5% in 2025, before edging up to 5.1% in 2027, with the 2026 forecast revised up by 0.1 percentage points, the Asian Development Bank (ADB) said in its latest report.
In the Asian Development Outlook (ADO) September 2026, released on Wednesday, ADB trimmed its regional inflation forecast for 2026 to 4.2% from 4.3% in July, as price stabilization measures partly offset the impact of persistently high energy prices.
The inflation forecast for 2027 is revised up slightly to 3.5%, compared with 3.4% in July. The revised inflation projections for both years remain above the 3% recorded in 2025.
“The region has remained resilient, but the risks are growing,” said ADB President Masato Kand.
Strong investment, government stimulus, and robust technology exports driven by the global artificial intelligence (AI) investment cycle are supporting growth, even as geopolitical tensions and a strengthening El Niño push up energy and food prices.
ADO September 2026 identifies two main risks to the region’s growth and inflation outlook. The first is escalating conflict, particularly a broadening of the Middle East conflict and an intensification of war in Ukraine, which could keep global energy prices elevated and volatile, and spill over to other commodities.
The second is a very strong El Niño, forecast to persist through the first quarter of 2027, which could raise energy demand and lower agricultural production, pushing up fuel and food prices. A sharp correction in AI-related equity valuations, tightening financial conditions, and renewed trade policy uncertainty pose further downside risks.