THE Asian Development Bank cut its economic growth forecasts for developing Asia, reflecting “worsened” prospects because of the war in Ukraine, faster monetary policy tightening in advanced economies and China’s Covid-19 lockdowns.

Developing Asia, a bloc that includes China and India, is forecast to grow by 4.6% this year, down from a 5.2% projection in April, the ADB said in its Asian Development Outlook supplement released Thursday. The outlook for 2023 was revised to 5.2% from 5.3%.

“Risks to developing Asia’s economic outlook remain elevated and mainly associated with external factors,” the ADB said, citing the impact to the region of an aggressive monetary tightening by the Federal Reserve and other major central banks as well as the fallout from the war.

China is expected to grow 4% this year, down from the 5% forecast previously. The region’s largest economy was hit by new coronavirus clusters in Shanghai and other cities, followed by lockdowns that weighed on consumption and investment at the start of the second quarter, the ADB said.

Potential lingering effects on supply chains from China’s latest lockdowns and its growth slowdown could hinder developing Asia’s economic momentum, it said.

Here are some more key points from the report:

• East Asia’s growth forecast is revised to 3.8% from 4.7% for 2022 due to slowing growth in China and softening global demand

• South Asia’s growth forecast is lowered to 6.5% from 7% for 2022, and to 7.1% from 7.4% for 2023 mainly due to the economic crisis in Sri Lanka and high inflation and associated monetary tightening in India

• The 2022 forecast for Southeast Asia is marginally upgraded to 5% from 4.9% as domestic demand benefits from the continued lifting of Covid curbs in some economies in the subregion

Economic risks to Asia are “elevated and mainly associated with external factors,” the bank said, adding that tighter monetary policies from the US Federal Reserve and other major central banks, as well as worsening fallout from Russia’s invasion of Ukraine could hurt growth. Within the region, “downside risks could arise from the potentially lingering effects on supply chains” from China’s “latest round of lockdowns and the country’s growth slowdown, which could hinder developing Asia’s growth momentum.”

China’s outlook has been clouded by Covid outbreaks and the ensuing restrictions intended to control them, along with an ongoing crisis in the property market. Economic growth slowed sharply to 0.4% in the second quarter, when dozens of cities including Shanghai and Changchun imposed lockdowns. Many economists expect China will likely miss its economic growth target of about 5.5% this year by a significant margin.

In a speech to global business leaders hosted by the World Economic Forum this week, Chinese Premier Li Keqiang signaled a focus on jobs, along with flexibility on the growth rate.