MANILA: The Asian Development Bank slightly raised its 2026 growth forecast for developing Asia and the Pacific to 5.0% from 4.9% previously while trimming its inflation outlook, saying resilient investment, government stimulus and AI-driven exports were countering the impact of energy prices and geopolitical tensions.
The Manila-based lender said risks remained tilted to the downside, warning that persistently high energy prices and an intensifying El Niño could weigh on growth and add to inflationary pressures.
* The ADB kept its 2027 growth forecast at 5.1% in its latest Asian Development Outlook.
* It trimmed its 2026 inflation forecast to 4.2% from a projection of 4.3% made in July, while raising its 2027 inflation forecast to 3.5% from 3.4% on expectations of a stronger El Niño impact.
* Softer demand in China and government efforts to cushion consumers from rising fuel costs in South Asia should help keep a lid on inflation this year.
* The ADB said stronger growth prospects in Southeast and South Asia, government stimulus and AI-related export demand supported the regional growth upgrade, even though growth forecasts were lowered for the Caucasus and Central and West Asia region and the Pacific.
* The ADB said elevated and volatile energy prices, driven by the prolonged Middle East conflict and the renewed escalation of Russia's war in Ukraine, continued to weigh on the outlook.
* The ADB said regional central banks have mostly kept policy rates steady this year as they balance inflation risks against support for growth, though future policy paths are expected to diverge depending on domestic conditions.
* Developing Asia and the Pacific comprises 43 ADB members across five sub-regions. - Reuters
