India Set to Outperform China, Asia-Pacific Despite Slowing Growth: ADB

New Delhi — India is expected to remain the fastest-growing major economy in the Asia-Pacific region, even as overall growth across developing Asia is projected to slow in the coming years, according to a new report by the Asian Development Bank.

The report estimates that growth in developing Asia and the Pacific will moderate to 5.1% in 2026 and 2027, down from 5.4% last year. Rising geopolitical tensions and ongoing trade uncertainties are cited as key factors weighing on the region’s economic momentum.

In contrast, India’s economy is forecast to stay strong, growing at 6.9% in 2026 and accelerating further to 7.3% in 2027. The ADB attributes this resilience primarily to steady domestic consumption, which continues to support economic activity.

While most economies in the region are expected to face a weaker growth outlook over the next two years, India stands out as a relative bright spot.

Meanwhile, growth in China is projected to slow to 4.6% this year and 4.5% next year, compared to 5% last year. The slowdown is largely linked to ongoing challenges in the property market and softer export performance.

The ADB also cautioned that risks to the regional outlook remain tilted to the downside. A prolonged conflict in the Middle East could drive up energy and food prices, tighten financial conditions, and put additional pressure on economies.

At the same time, volatility in global trade policies continues to pose uncertainty. However, strong domestic demand, stable labour markets, and increased public infrastructure spending are expected to offer some cushion.

The report added that demand for artificial intelligence-related goods could provide a modest boost to growth, while oil prices are likely to remain elevated in the short term before stabilising if geopolitical tensions ease.

With inputs from IANS