New Delhi: The Asian Development Bank has reduced its forecast for India’s economic expansion in fiscal year 2027. It cited ongoing disruptions in global energy supplies after the West Asia conflict, which are raising fuel costs and curbing domestic consumption.
In the July 2026 Asian Development Outlook issued on Wednesday, the bank revised India’s GDP growth estimate down to 6.6 percent from the 6.9 percent issued in April. The new figure still exceeds the International Monetary Fund’s 6.4 percent projection for the same period.
The updated outlook remains above the bank’s prior 6.5 percent estimate for the current fiscal year, which was increased to 6.9 percent in April. While adjusting the FY27 view, the bank kept its FY28 growth projection for India unchanged at 7.3 percent.
The report noted that global energy market disruptions are likely to ease only slowly despite a June framework agreement. It warned that effects on fertilizers, other commodities and supply chains could sustain inflationary pressures. Durable execution of the agreement might normalize energy markets, though the adjustment pace carries notable downside risks, according to the bank’s chief economist.
Growth across developing Asia and the Pacific stays resilient overall, yet ongoing conflict-related pressures call for balanced policies to support expansion while controlling inflation. The bank also trimmed forecasts for Southeast Asia and the Pacific due to softer domestic demand, tourism, higher inflation and increased import costs.
Renewed conflict or extended geopolitical tensions represent major risks that could further tighten energy supplies, lift risk premiums and intensify price and external strains. Tighter global financial conditions, rising bond yields, wider fiscal deficits, higher tariffs and elevated fertilizer costs add further concerns for output and food security.
Inflation in developing Asia and the Pacific is now projected to average 4.3 percent in 2026, up from 3 percent in 2025 and 0.7 points above the April estimate. The 2027 inflation forecast stayed at 3.4 percent. Growth projections for 2026-27 were lowered in most subregions except developing East Asia. China’s forecasts remained at 4.6 percent for 2026-27 and 4.5 percent for 2027-28.
Overall, the bank cut its 2026 growth forecast for developing Asia and the Pacific to 4.9 percent from 5.5 percent in 2025, a 0.2 point reduction from April. It held the 2027 forecast at 5.1 percent, anticipating a recovery as pressures subside.
