The Asian Development Bank says strong economic growth in India and increasing demand for technology in advanced economies are improving developing Asia’s prospects.

The Asian Development Bank (ADB) said on Tuesday that strong growth in India and rising demand for advanced technology in key regional economies have improved the economic outlook for developing Asia and the Pacific for both this year and next.

The bank raised its 2025 growth forecast for the region to 5.1 percent and lifted its projection for 2026 to 4.6 percent, citing resilient domestic demand and easing global financial conditions.

South Asia is expected to expand by 6.5 percent in 2025, supported largely by India’s continued momentum. India grew 8.2 percent in the second fiscal quarter, outperforming earlier estimates and reinforcing its position as the fastest-growing major economy in the region.

ADB said Southeast Asia is on course for 4.5 percent growth, although global conflicts, climate-related disruptions and political uncertainty in several countries continue to pose risks.

China’s economy is projected to grow 4.8 percent in 2025, slightly higher than previous forecasts but still short of Beijing’s official target, reflecting weak consumer sentiment and structural challenges.

The bank said regional inflation is expected to fall to 1.6 percent in 2025 before rising modestly to 2.1 percent in 2026, helped by stable commodity prices.

ADB added that despite an improved outlook, governments across Asia will need to manage volatile energy markets, uneven global trade recovery and rising climate costs to maintain growth.