India is expected to outpace the broader Asian region and China in economic growth, as per a recent report by the Asian Development Bank (ADB). While developing Asia and the Pacific are projected to experience a slowdown in growth over the next two years due to geopolitical challenges, India’s growth is forecasted to remain strong. The ADB analysis suggests that economic growth in developing Asia and the Pacific will ease to 5.1% in 2026 and 2027, down from 5.4% last year, influenced by geopolitical tensions and trade uncertainties.
India’s growth is anticipated to stay robust at 6.9% in 2026 and is expected to accelerate to 7.3% in 2027, driven by resilient domestic consumption. The report highlights India’s relative strength compared to most economies in the region that are expected to face a worsening growth outlook. The ADB report also mentions that the region is entering a global environment of uncertainty with a strong foundation supported by solid domestic demand, stable labor markets, and increased public infrastructure spending.
The growth outlook for the People’s Republic of China (PRC) is less optimistic, with a projected decline to 4.6% this year and 4.5% next year from 5% last year. Factors such as property market weakness and slower export expansion are likely to impact China’s economic activity. ADB Chief Economist Albert Park highlighted that a prolonged conflict in the Middle East could lead to increased energy and food prices, tightening financial conditions and posing a significant threat to the region’s economic prospects.
Despite challenges such as global trade policy volatility, resilient private consumption, and strong demand for artificial intelligence-related products are expected to offer some support to regional economies. The report also mentions that while oil prices are expected to remain high in the short term, they could stabilize gradually if geopolitical tensions ease.
