The Asian Development Bank stated on Wednesday that the forecast for developing Asia and the Pacific for this year and the next has improved due to strong demand for goods from the region's high-tech economies and India's faster-than-expected growth.
In an update to its Asian Development Outlook, the ADB stated that growth in 2025 is now expected to reach 5.1%, up from 4.8% in September and higher than 4.9% when it first published the report in April.
Citing less trade uncertainty following a number of U.S. deals, it also increased its 2026 growth prediction for the region from 4.5% to 4.6%.With the exception of Japan, Australia, and New Zealand, the region's 46 economies range from China and India to Georgia and Samoa.
"While regional growth is expected to moderate next year, export strength, underpinned by the upturn in the AI and electronics cycle, will help to sustain economic activity, alongside lower trade uncertainty," the Asian Development Bank stated.
"Possible re-escalations of tariffs and trade policy uncertainty, and intensification of financial market volatility, remain significant downside risks for the outlook," it stated.
Subregional prospects have also improved; South Asia is now predicted to grow 6.5% this year, up from a previous estimate of 5.9%, while India exceeded projections to grow 8.2% in its fiscal second quarter that ended in September.

Southeast Asia is predicted to grow by 4.5% this year, up from 4.3% last year, and by 4.4% in 2026. However, according to the ADB, there are still risks associated with internal political events, climate-related disruptions, and global uncertainty.
These vulnerabilities are highlighted by recent occurrences, such as the severe floods that occurred in late November in Indonesia, Thailand, and Malaysia, which resulted in hundreds of deaths and millions of displaced people.
A precarious ceasefire mediated by U.S. President Donald Trump following five days of combat in July has been derailed as conflict between Thailand and Cambodia has now resumed, with fresh border confrontations and airstrikes this week.

China's 2025 forecast increased slightly from 4.7% to 4.8%, which is still below Beijing's aim of 5.0%. The 2026 forecast stayed at 4.3%, indicating the nation's real estate market's ongoing weakness.
"The persistent property sector downturn continued to weigh on activity, with a sharper decline in property investment pulling fixed asset investment down and slowing infrastructure and manufacturing investment," the Asian Development Bank stated.
According to the ADB, inflation is expected to decrease from 1.7% in September to 1.6% in 2025 before increasing to 2.1% in 2026.