The Asian Development Bank (ADB) on Wednesday projected that India’s GDP will grow at 6.5% in 2025 and a robust 6.7% in 2026, driven by strong domestic demand, a normal monsoon, and monetary easing.
Inflation in India is expected to stay well within the Reserve Bank of India’s target range, with headline inflation projected at 3.8% for 2025 and 4.0% for 2026, according to the ADB. A sharp decline in food prices has helped ease overall price pressures, with Consumer Price Index (CPI) inflation falling to 2.1% in June — the lowest level in over six years — as food inflation turned negative.
India’s real GDP growth is projected to range between 6.4% and 6.7% this fiscal year, reaffirming the country’s position as the fastest-growing major economy in the world, the Confederation of Indian Industry (CII) said earlier this month.
Meanwhile, ADB has lowered its growth forecasts for developing Asia and the Pacific for both this year and the next. The downward revisions are attributed to weaker exports due to higher US tariffs and global trade uncertainty, as well as subdued domestic demand.
According to the Asian Development Outlook (ADO) July 2025, the region’s economies are now expected to grow by 4.7% this year, a 0.2 percentage point decrease from April’s projection. The 2026 forecast has also been revised downward to 4.6% from 4.7%.
The outlook for developing Asia and the Pacific could worsen further if US tariffs and trade tensions escalate. Other risks include geopolitical conflicts that could disrupt global supply chains and drive up energy prices, as well as a deeper-than-expected slump in China’s property market.
“Asia and the Pacific have weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,” said ADB Chief Economist Albert Park.
“Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment, and growth,” Park added.
Growth projections for the People’s Republic of China (PRC), the region’s largest economy, remain unchanged at 4.7% for this year and 4.3% for next year. Southeast Asian economies are expected to be hit hardest by deteriorating trade conditions and rising uncertainty. ADB now forecasts growth of 4.2% for the subregion this year and 4.3% next year—both figures roughly half a percentage point lower than the April estimates.
— IANS
