The Asian Development Bank (ADB) cut its growth forecasts for developing Asia and the Pacific as higher US tariffs hurt the region’s economic outlook, according to the Asian Development Outlook September 2025. ADB now expects regional economies to grow 4.8% this year and 4.5% next year. That’s down from April forecasts of 4.9% and 4.7%. The bank trimmed its outlook as the new global trade environment takes shape around tariffs and updated trade deals. Chief Economist Albert Park said “US tariffs have settled at historically high rates and global trade uncertainty remains at elevated levels.” Inflation should drop to 1.7% this year before rising slightly to 2.1% next year as food prices get back to normal.
The region has held up well thanks to strong exports and solid domestic demand. But the tougher external environment is starting to hurt. US tariffs on various Asian exports are dragging down growth prospects across multiple countries. Trade uncertainty makes it harder for businesses to plan investments and expand, creating problems for economic activity.
China’s growth forecasts stayed the same at 4.7% this year and 4.3% next year. Policy support should cushion the blow from higher tariffs and continued weakness in the property market. India faces steeper US tariffs that started in August. ADB lowered India’s growth forecasts to 6.5% for both 2025 and 2026, down from earlier predictions of 6.7% and 6.8%. Southeast Asia got the biggest cuts. Growth is now expected at 4.3% for both years – down 0.4 percentage points from April – because of weaker global demand and trade uncertainty.
Other regions saw mixed results. Caucasus and Central Asia got a small boost to 5.5% this year but next year’s forecast dropped to 4.9% because of lower oil and gas production. Pacific economies got bumped up to 4.1% this year from stronger mining output, but 2026 forecasts fell to 3.4% on expectations of weaker resource output and lower commodity exports.
ADB warned about continuing risks including uncertainty around US trade policy, possible tariffs on semiconductors and pharmaceuticals, and unresolved US-China trade talks.
