ADB Releases Asian Development Outlook (ADO) September 2025: India’s GDP Growth Forecast at 6.5% for FY26 and FY27.

In September 2025, the Manila-based Asian Development Bank (ADB) published its report “Asian Development Outlook (ADO) September 2025 – Growth Slows as a New Global Trade Environment Takes Shape.” The report forecasted India’s GDP growth at 6.5% in both FY2025-26 (FY26) and FY2026-27 (FY27), while highlighting inflation trends, trade challenges, and regional growth projections for East Asia and South Asia.

      - ADB maintained its projection of India’s GDP growth at 6.5% for both FY26 and FY27. While the FY26 estimate remains unchanged from July 2025, the FY27 forecast was revised downward from 6.7% to 6.5%.

      - India’s economy recorded strong growth of 7.6% in Q1 FY26 (April–June 2025), supported by robust private consumption and public capital spending. However, weaker net exports partly offset these gains.

      - Inflation in India is projected to moderate to 3.1% in FY26 due to declining food prices and then rise to 4.2% in FY27 as food price trends normalize.

Main Point :-   (i) Growth momentum is expected to be weighed down by U.S. tariffs, which affect nearly 60% of India’s merchandise exports. Merchandise exports are projected to rise only modestly, while services exports are expected to remain strong and act as a major growth driver.

      (ii) ADB maintained East Asia’s GDP growth forecast at 4.4% for 2025 but revised the 2026 outlook downward to 3.9%, reflecting weaker trade conditions in the region.

(iii) South Asia’s GDP is expected to grow at 5.9% in 2025 and 6.0% in 2026. Both projections are slightly lower than estimates published in ADO April 2025, showing the impact of global trade challenges.
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