India's Economy expected to Grow at 6.5 percent in 2025, 6.7 percent in 2026: ADB

New Delhi (The Uttam Hindu): The Asian Development Bank (ADB) said on Wednesday that India's GDP can grow at the rate of 6.5 percent in 2025 and 6.7 percent in 2026. This is due to strong domestic demand and soft monetary policy.

Inflation could reach 3.8 per cent this year and 4 per cent in 2026, in line with the target range set by the Reserve Bank of India (RBI), ADB said in a statement.

The statement further said that the decline in food inflation in India has also helped in controlling core inflation. Due to food inflation turning negative, Consumer Price Index (CPI) inflation declined to 2.1 percent in June, the lowest in 77 months.

The Confederation of Indian Industry (CII) earlier this month said India's real GDP growth is projected to be in the range of 6.4-6.7 per cent this fiscal year, consolidating the country's position as the fastest growing major economy in the world.

However, ADB has lowered its growth forecasts for economies in the developing Asia and Pacific region due to fears of lower exports amid higher US tariffs and global trade uncertainty as well as weak domestic demand.

In its Asian Development Outlook (ADO) July 2025, ADB released estimates that the region's economies will grow at a rate of 4.7 percent this year, which is 0.2 percentage points lower than the estimate released in April. At the same time, the forecast for next year has been reduced from 4.7 percent to 4.6 percent.

Escalation of US tariffs and trade tensions could further hurt growth prospects in the Asia and Pacific region.

Other risks include conflict and geopolitical tensions that could disrupt global supply chains and increase energy prices, and the People's Republic of China's (PRC) property market could deteriorate more than expected.

"The Asia and Pacific region has faced a consistently challenging external environment this year. But the economic outlook has weakened amid rising risks and global uncertainty," said ADB Chief Economist Albert Park.

ADB maintained its growth forecast for China, the region's largest economy, at 4.7 percent this year and 4.3 percent next year.

ADB now estimates that Southeast Asia's economies will be hit hardest by deteriorating trade conditions and uncertainty. The subregion's economies will grow 4.2 percent this year and 4.3 percent next year, roughly half a percentage point lower than April forecasts for each year.