The Asian Development Bank (ADB) has raised its India GDP growth forecast for 2026 to 7%, up from 6.6% earlier. The 40-basis-point revision reflects strong public investment and firm export growth. ADB also raised its South Asia growth forecast to 6.4%, while warning of risks from geopolitical tensions, energy prices and El Niño.
Key Highlights
- ADB raised India’s 2026 GDP forecast to 7%, up 40 basis points.
- Strong public investment and exports are supporting India’s growth outlook.
- South Asia’s 2026 growth forecast was raised to 6.4% from 6%.
- ADB flagged geopolitical tensions, energy prices and El Niño as key risks.
New Delhi, sept 23: The Asian Development Bank (ADB) has raised its forecast for India’s GDP growth in 2026 (FY27) to 7%, from its earlier projection of 6.6%. The 40-basis-point upward revision reflects stronger economic momentum, with the multilateral development bank citing strong public investment and firm export growth in India as key factors supporting the outlook.
The upward revision for India has also lifted ADB’s growth projection for South Asia to 6.4% in 2026, compared with 6% in its July forecast. The region’s growth outlook is being supported by investment and exports, particularly India’s contribution to regional economic activity. ADB President Masato Kanda said the region has remained resilient, but risks to growth are increasing.
According to the Asian Development Outlook (ADO) September 2026, developing Asia and the Pacific is expected to grow by 5% in 2026, moderating from 5.5% in 2025, before increasing marginally to 5.1% in 2027. Strong investment, government stimulus and technology exports linked to the global artificial intelligence investment cycle are supporting economic activity across the region. At the same time, geopolitical tensions and rising energy and food prices pose challenges.
ADB has identified two major risks to the region’s growth and inflation outlook. An escalation of conflicts, particularly a broader Middle East conflict or intensification of the Russia-Ukraine war, could keep global energy prices elevated and volatile. A strong El Niño, which is forecast to persist through the first quarter of 2027, could reduce agricultural production and hydropower generation while increasing energy demand, potentially putting upward pressure on food and fuel prices.
The ADB has trimmed its regional inflation forecast for 2026 to 4.2% from 4.3% in July, partly reflecting price stabilisation measures. However, the report also pointed to additional downside risks from a sharp correction in AI-related equity valuations, tighter financial conditions and renewed uncertainty over trade policies. For India, the revised 7% growth forecast reflects the continued contribution of public investment and exports to economic activity.
ADB’s revised 7% India GDP growth forecast for 2026 reflects stronger public investment and exports, while global energy markets, geopolitical developments, El Niño and financial conditions remain important risks for the broader regional outlook.
