ADB lowers Asia-Pacific growth forecast amid trade frictions

THE Asian Development Bank (ADB) has revised downward its GDP growth forecast for Asia and the Pacific, including Sri Lanka, citing heightened risks from escalating US tariff policies and rising global trade tensions.

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The updated projection was released yesterday in the ADB’s Asian Development Outlook (ADO) July 2025 report, reflecting a broader regional slowdown.

Although the ADB did not disclose Sri Lanka’s exact revised figure in the summary, the broader South Asia regional growth forecast has been reduced to 5.9%, down from 6% projected in the ADO’s April 2025 edition. The updated outlook reflects both external shocks and mounting trade-related headwinds.

The ADB lowered its growth forecasts for economies in developing Asia and the Pacific this year and next year.

It forecasts the region’s economies will grow by 4.7% this year, a 0.2 percentage point decline from the projection issued in April. The forecast for next year has been lowered to 4.6% from 4.7%.