ADB holds China growth forecast at 4.6%, cuts inflation view as demand softens

A China inflation forecast below 1% for both this year and next underlines how little price pressure the world's second-largest economy is generating, keeping deflation risk in view and leaving room for further policy support from Beijing. That contrasts with much of the rest of the region, where energy costs tied to the Middle East conflict keep inflation elevated and limit central banks' scope to ease. For commodity markets, an unchanged China growth path offers little sign of a demand-led lift, leaving energy prices driven mainly by supply disruptions. The ADB's expectation of diverging policy paths points to wider dispersion in Asian rates and currencies. The ADB sees China growing steadily but generating almost no inflation, even as energy shocks keep prices elevated elsewhere in developing Asia. Summary: The ADB held its China growth forecasts at 4.6% for 2026 and 4.5% for 2027, following 5.0% growth in 2025 It cut its 2026 China inflation forecast to 0.9% from 1.2% in July and kept 2027 at 0.9%, after flat prices in 2025 Developing Asia and the Pacific's 2026 growth forecast rose to 5.0% from 4.9%, with 2027 unchanged at 5.1%, helped by investment, stimulus and AI-driven exports Regional inflation for 2026 was trimmed to 4.2% from 4.3%, partly on softer Chinese demand, while the 2027 forecast rose to 3.5% from 3.4% on a stronger expected El Niño India's 2026 growth forecast was raised to 7.0% from 6.6%, and Southeast Asia's to 4.7% from 4.6%, while forecasts for the Caucasus and Central and West Asia and the Pacific were cut The ADB said risks remain tilted to the downside, citing high energy prices from the Middle East conflict and Russia's war in Ukraine, and an intensifying El Niño In its latest Asian Development Outlook, the Manila-based lender held China's growth forecast at 4.6% for 2026 and 4.5% for 2027, the same as in July. China grew 5.0% in 2025. The forecasts for the broader East Asia sub-region, in which China is by far the largest economy, have