The Asian Development Bank (ADB) has lowered its growth forecasts for economies in developing Asia and the Pacific this year and next year. The downgrades are driven by expectations of reduced exports amid higher United States (U.S.) tariffs and global trade uncertainty, as well as weaker domestic demand. ADB forecasts the region’s economies will grow by 4.7% this year, a 0.2 percentage point decline from the projection issued in April. The forecast for next year has been lowered to 4.6% from 4.7%, according to Asian Development Outlook (ADO) July 2025 released today.
Prospects for developing Asia and the Pacific could be dented further by an escalation of U.S. tariffs and trade tensions. Other risks include conflicts and geopolitical tensions that could disrupt global supply chains and raise energy prices, and a worse-than-expected deterioration in the property market of the People’s Republic of China (PRC).
Growth projections for the PRC, the region’s largest economy, are maintained at 4.7% this year and 4.3% next year. Policy stimulus for consumption and industrial activity is expected to offset continuing property market weakness and softening exports. India, the region’s second-largest economy, is forecast to grow by 6.5% this year and 6.7% next year—down 0.2 and 0.1 percentage points, respectively, from April projections—as trade uncertainty and higher U.S. tariffs affect exports and investment. Economies in Southeast Asia will likely be hardest hit by worsened trade conditions and uncertainty. ADB now predicts the subregion’s economies will grow 4.2% this year and 4.3% next year, down roughly half a percentage point from April forecasts for each year.