Asia May Accelerate Growth Again in 2027

The revision is primarily due to higher energy prices, supply disruptions, and tighter financial conditions. The forecast for 2027 remains unchanged at 5.1%, suggesting a gradual recovery in activity as these factors ease. In 2025, the region grew by approximately 5.5%. (Source: Asian Development Bank, 08.07.2026).

At the same time, the ADB significantly raised its inflation forecast for this year. In April, inflation was expected to reach 3.6%; by July, the estimate had been revised up to 4.3%. The main reason was the increase in oil and gas prices, which is gradually feeding through to the cost of food, fertilizers, and other goods. Inflation is forecast at 3.4% in 2027 (Source: Asian Development Bank, 08.07.2026).

Growth trends remain uneven across the region. For developing East Asia, the ADB forecasts growth of 4.6% in 2026 and 4.5% in 2027. South Asia remains the fastest-growing subregion, with forecasts of 6.0% and 6.7%, respectively. Growth in Southeast Asia is estimated at 4.6% in 2026 and 4.8% in 2027. Central and West Asia could accelerate from 3.8% to 4.2%. These differences are largely explained by countries’ dependence on energy imports, the strength of domestic demand, and the role of exports in their economies. (Source: Asian Development Outlook, July 2026).

Domestic demand remains the region’s main source of resilience. In South Asia and some Southeast Asian countries, consumption, investment, and infrastructure spending continue to support economic activity despite worsening global conditions. Asian economies also retain strong positions in the production of semiconductors and other technology products. The ADB notes that additional risks include a possible new increase in tariffs, tighter global financial conditions, and further disruptions in energy markets.

The expected acceleration in 2027 appears realistic, provided energy markets gradually normalize and domestic demand remains strong. At the same time, the region is becoming increasingly diverse. India and several South Asian economies can sustain growth through domestic consumption and investment, while more export-oriented countries remain sensitive to global trade and demand for technology products. If inflation does fall to the forecast 3.4%, central banks will have more room to ease financial conditions. This could provide an additional source of growth and help Asia retain its role as one of the world economy’s main growth engines in 2027.

Author: Assistant, Department of World Economy and International Finance, Financial University under the Government of the Russian Federation, Nikita Dmitrievich Klevanets.