World

ADB cuts developing Asia growth view on slowing China expansion

THE Asian Development Bank cut its economic growth forecast for China and also lowered its outlook for developing Asia amid rising interest rates, a prolonged war in Ukraine and Beijing’s Covid Zero policy.

The region is seen expanding 4.3% this year, according to the bank’s Asian Development Outlook Update released Wednesday, compared with a 4.6% projection in July. Growth in China, the largest economy in Asia, is expected to be slower at 3.3% against a 4% expansion seen previously.

Sporadic Covid-19 outbreaks and new lockdowns have weakened China’s growth, which ADB said will be slower than the rest of developing Asia for the first time in more than three decades. Excluding China, the rest of developing Asia is forecast to expand 5.3% this year.

“Developing Asia continues to recover, but risks loom large,” ADB Chief Economist Albert Park said. A significant global downturn would undermine exports, while stronger-than-expected monetary tightening in advanced economies could stoke financial instability, he said.

This year’s growth forecast for India was cut to 7% from 7.2%, due to inflation and monetary tightening. Robust domestic demand in Indonesia and the Philippines are contributing to Southeast Asia’s improved outlook of 5.1% expansion.

While inflation in the region is lower than elsewhere, supply disruptions continue to fan food and fuel prices. “Governments in developing Asia need to remain vigilant against these risks and take the necessary steps to contain inflation without derailing growth,” Park said.

 

Other Highlights:

  • Consumer spending and employment are picking up on reduced mobility restrictions
  • Exports remained strong in the first half of 2022, but slowing rapidly as global demand for electronics eases
  • Tourism has rebounded in 14 economies due to looser travel restrictions
Annual Inflation Growth
2021 2022 2023
Actual July forecast Sept. forecast July forecast Sept. forecast
Developing Asia 2.5% 4.2% 4.5% 3.5% 4.0%
Central Asia 8.9% 11.3% 11.5% 8.1% 8.5%
Kazakhstan 8.0% 10.8% 11.2% 6.7% 7.5%
East Asia 1.1% 2.3% 2.5% 2.1% 2.5%
Hong Kong, China 1.6% 1.8% 2.0% 2.0% 2.0%
China 0.9% 2.1% 2.3% 2.0% 2.5%
South Korea 2.5% 4.5% 4.5% 3.0% 3.0%
Taipei, China 2.0% 2.8% 2.8% 2.0% 2.0%
South Asia 5.8% 7.8% 8.1% 6.6% 7.4%
India 5.5% 6.7% 6.7% 5.8% 5.8%
Southeast Asia 2.0% 4.7% 5.2% 3.4% 4.1%
Indonesia 1.6% 4.0% 4.6% 3.3% 5.1%
Malaysia 2.5% 2.7% 2.7% 2.5% 2.5%
Philippines 3.9% 4.9% 5.3% 4.3% 4.3%
Singapore 2.3% 4.7% 5.5% 2.3% 2.3%
Thailand 1.2% 6.3% 6.3% 2.7% 2.7%
Vietnam 1.8% 3.8% 3.8% 4.0% 4.0%
The Pacific 3.1% 5.9% 6.2% 4.7% 4.8%
Source: Asian Development Outlook 2022 September Update
Dayang Norazhar

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