ADB sees slower rate cuts ahead for developing Asia

July 23,2025(MLN): Monetary policy easing is expected to continue across developing Asia, but the pace of rate cuts has been projected to slow, due to rising trade risks and external shocks, according to the Asian Development Outlook (ADO) July 2025.

The Asian Development Bank (ADB) has lowered its growth forecasts for the region’s economies to 4.7% for 2025 and 4.6% for 2026, down from earlier projections.

This revision is driven by expectations of reduced exports amid higher U.S. tariffs, ongoing global trade uncertainty, and weaker domestic demand.

ADB warns that growth prospects could further deteriorate if trade tensions escalate.

Additional risks include geopolitical conflicts that may disrupt supply chains and energy markets, as well as continued challenges in the People’s Republic of China’s property sector.

Growth projections for the PRC remain steady at 4.7% in 2025 and 4.3% in 2026, supported by policy stimulus aimed at boosting consumption and industrial output.

India’s growth forecast has been slightly revised downward to 6.5% in 2025 and 6.7% in 2026.

Southeast Asia faces the sharpest downgrades, with growth now expected at 4.2% in 2025 and 4.3% in 2026.

In contrast, the Caucasus and Central Asia subregion received an upward revision, with projected growth of 5.5% and 5.1% respectively, buoyed by stronger oil production.

Inflation in developing Asia is projected to ease further, with headline rates forecast at 2.0% in 2025 and 2.1% in 2026, as food and energy prices stabilize.

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