New Delhi, September 23 (IANS). The Asian Development Bank (ADB) has raised India's GDP growth forecast to 7.0 percent for 2026 (FY 2026-27). This is 40 basis points more than its earlier estimate of 6.6 percent.
ADB said in a statement that this year's economic growth forecast for South Asia has been raised to 6.4 percent from 6 percent in July. In this, strong government investment and solid growth in exports play an important role in India's economic development.
However, according to the report, the economic growth of developing Asia and the Pacific region may decline from 5.5 percent in 2025 to 5 percent this year. After this, it may increase marginally to 5.1 percent in 2027 (financial year 2027-28).
This estimate for 2026 is 0.1 percentage point higher than the previous estimate released in July.
“The region remains resilient, but risks are increasing,” said ADB President Masato Kanda.
In contrast to a strengthening La Nina, El Nino and dry conditions may reduce crop production and reduce hydropower production. This could lead to rising food and energy prices and the most vulnerable groups could be hit the hardest.
Kanda said it has become even more important for governments to protect and prepare those most affected amid the protracted energy crisis and resurgent risks in financial markets. He said that ADB is strongly supporting such efforts.
ADB said robust investment, government stimulus and strong technology exports fueled by the global Artificial Intelligence (AI) investment cycle are supporting economic growth. However, geopolitical tensions and a strengthening El Nino are putting upward pressure on energy and food prices.
Asian Development Outlook (ADO) In September 2026, ADB has reduced the regional inflation forecast for 2026 to 4.2 percent from 4.3 percent in July. Price stabilization measures have partially mitigated the impact of persistently high energy prices.
According to the ADO September 2026, there are two major risks to the region's economic growth and inflation outlook.
The first risk is escalating conflict, particularly an expansion of the conflict in the Middle East and an intensification of the Russia-Ukraine war. This could keep global energy prices high and volatile and could impact other commodities as well.
The second risk is a very strong El Nino, which is projected to last through the first quarter of 2027. This could increase energy demand and reduce agricultural production, leading to higher fuel and food prices.
ADB said that a sharp decline in the valuations of shares of AI-related companies, tightening of financial conditions and increasing uncertainty over trade policy could also pose downside risks to economic growth.
–IANS
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