Developing Asia is forecast to grow 4.8% this year, down from the previous outlook of 4.9%, the ADB said in its Asian Development Outlook, released Tuesday. Similarly, the projection for next year was downgraded to 4.5% from 4.7% made in April.

The ADB said a potential escalation in US tariffs and ongoing trade tensions are weighing on exports and growth in the region. But the growth in 2025 remain supported by strong exports and stable domestic demand.

Inflation across developing Asia and the Pacific is seen easing to 2% this year and 2.1% next year, helped by declining oil prices and strong agricultural output.