ADB lifts Nepal growth estimate to 3.9% while cutting Sri Lanka outlook

The Asian Development Bank upgraded its forecast for Nepal’s 2026/27 economy, raising the expected growth rate to 3.9% from the earlier 2.7% projection. The revision reflects strong performance in the country’s hydropower sector and a revised inflation outlook of 3.2%, down from 3.7%.

For Sri Lanka, the ADB kept the 2026 growth estimate at 4.0% but lowered the 2027 projection to 4.0% from 4.2%. Inflation expectations were increased to 6.0% for 2026 and 5.2% for 2027, driven by rising global energy prices, Middle‑East tensions and higher fuel and fertiliser costs. The report also noted a regional slowdown, trimming the overall Asian development outlook to 4.9% from 5.1% and highlighting fiscal pressures and tighter monetary policy in Sri Lanka.