MANILA : The Asian Development Bank (B) on Thursday slashed its growth forecasts for developing Asia for this year and next, reflecting the economic fallout from Russia’s war in Ukraine and aggressive tightening by global central banks to tame inflation.
Also contributing to its weaker growth forecasts was a sharper-than-expected deceleration in China prompted by its lingering COVID-19 lockdowns, the B said in a supplement to its Asian Development Outlook report.
Downgrading its 2022 forecast for a third time, the B said it now expects the bloc’s combined economy, which includes China and India, to expand 4.6 per cent, slower than its 5.2 per cent projection in April.
“Risks to developing Asia’s economic outlook remain elevated and mainly associated with external factors,” the B said, citing a substantial slowdown in global growth, the U.S. Federal Reserve’s aggressive tightening, and surge in commodity prices.
For 2023, the region is forecast to grow 5.2 per cent, down slightly from its earlier forecast of 5.3 per cent, the B said.
“From 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,” the multilateral lending organisation said.
China’s economy will likely expand 4.0 per cent this year, the B said, a drop of 1 per centage point from its April forecast, but will recover lost ground in 2023 with growth seen at 4.8 per cent.
The growth outlook for the sub-regions was mixed, with Southeast Asia, Central Asia and the Pacific expected to grow faster than initially projected, while South Asia was forecast to expand more slowly due to the economic crisis in Sri Lanka and high inflation in India.
The B chopped its growth forecast for South Asia to 6.5 per cent from 7.0 per cent this year and to 7.1 per cent from 7.4 per cent in 2023.
With soaring inflation gripping much of the world, the B upgraded its inflation forecasts for this year and next to 4.2 per cent and 3.5 per cent from 3.7 per cent and 3.1 per cent, respectively.
“Inflation pressures in the region, are however, less than elsewhere in the world,” the B said.
GDP GROWTH
2020 2021 2022 2022 2022 2022 2023 2023
SEPT DEC APR JULY APR JULY
Central Asia -2.0 5.6 4.2 4.4 3.6 3.8 4.0 4.1
East Asia 1.8 5.1 5.0 4.7 3.8 4.5 4.5
7.7
China 2.2 8.1 5.5 5.3 5.0 4.0 4.8 4.8
South Asia -5.2 7.0 7.0 7.0 6.5 7.4 7.1
8.1
India -6.6 7.5 7.5 7.5 7.2 8.0 7.8
8.7
SEast Asia -3.2 2.9 5.0 5.1 4.9 5.0 5.2 5.2
Indonesia -2.1 3.7 4.8 5.0 5.0 5.2 5.2 5.3
Malaysia -5.6 3.1 6.1 5.9 6.0 5.8 5.4 5.1
Myanmar 3.2 -18.4 n/a n/a -0.3 n/a 2.6 n/a
Philippines -9.6 5.5 6.0 6.0 6.5 6.3 6.3
5.7
Singapore -4.1 7.6 4.1 4.1 4.3 3.9 3.2 3.2
Thailand -6.2 3.9 4.0 3.0 2.9 4.5 4.2
1.5
Vietnam 2.9 2.6 6.5 6.5 6.5 6.5 6.7 6.7
The Pacific -6.0 -0.6 4.8 4.7 3.9 4.7 5.4 5.4
Developing -0.8 6.9 5.4 5.3 5.2 4.6 5.3 5.2
Asia
INFLATION
2020 2021 2022 2022 2022 2022 2023 2023
SEPT DEC APR JULY APR JULY
Central Asia 7.7 8.9 6.7 7.3 8.8 11.3 7.1 8.1
East Asia 2.2 1.1 2.2 2.0 2.4 2.3 2.0 2.1
China 2.5 0.9 2.3 2.1 2.3 2.1 2.0 2.0
South Asia 6.5 5.1 5.3 6.5 7.8 5.5 6.6
5.8
India 6.2 4.8 4.8 5.8 6.7 5.0 5.8
5.5
SEast Asia 1.5 2.0 2.4 2.5 3.7 4.7 3.1 3.4
Indonesia 2.0 1.6 2.7 2.7 3.6 4.0 3.0 3.3
Malaysia -1.1 2.5 2.3 2.3 3.0 2.7 2.5 2.5
Myanmar 5.7 3.6 n/a n/a 8.0 n/a 8.5 n/a
Philippines 2.4 3.9 3.5 3.7 4.2 4.9 3.5 4.3
Singapore -0.2 2.3 1.4 1.4 3.0 4.7 2.3 2.3
Thailand -0.8 1.2 1.0 1.4 3.3 6.3 2.2 2.7
Vietnam 3.2 1.8 3.5 3.8 3.8 3.8 4.0 4.0
The Pacific 2.9 3.1 4.1 4.1 5.9 5.9 4.7 4.7
Developing 3.2 2.5 2.7 2.7 3.7 4.2 3.1 3.5
Asia