A new Asian Development Bank (ADB) report has showed that continuedtepid demand from the major industrial economies coupled with China’sslower growth are weighing on the outlook for developing Asia.
The latest ‘Asian Development Outlook Supplement’ released on July16 trimmed the 2013 growth forecast for the 45 developing membercountries of ADB to 6.3 percent and cut its 2014 forecast to 6.4percent. In April, ADB had predicted the region to grow 6.6 percent thisyear and 6.7 percent next year.
“The drop in tradeand scaling back of investment are part of a more balanced growth pathfor China, and the knock-on effect of its slower pace is definitelya concern for the region. But we are also seeing more subdued activityacross much of developing Asia ,” said ADB Chief Economist ChangyongRhee.
According to the report, China - home todeveloping Asia’s largest economy - is likely to see its economyexpand 7.7 percent this year and 7.5 percent in 2014 after a growth of7.8 percent in 2012.
China’s slower growth hassubdued the outlook for the entire East Asia region as well as, to alesser extent, for Southeast Asia where the Philippines and otherlarge ASEAN countries are otherwise seeing solid growth.
In India , meanwhile, slow progress in pushing through the reformsneeded to ease business bottlenecks means growth is likely to be 5.8percent this year, slower than the previously forecast of 6.0 percent.ADB maintains its 2014 forecast of 6.5 percent for 2014.
Elsewhere in South Asia, Sri Lanka continues to grow stronglywhile other parts of the region will see softer than anticipated growth.
The report also trimmed forecasts for Central Asia,reflecting the sluggish economic performance of Kazakhstan andGeorgia, and for the Pacific where Timor-Leste is seeing a slowdown ingovernment spending.
Inflation pressures,meanwhile, are waning on the back of declining energy and food prices,given slower global demand for fuels and bumper grain harvests.
A DB, based in Manila, is dedicated to reducing poverty in Asiaand the Pacific through inclusive economic growth, environmentallysustainable growth and regional integration.
Established in 1966, it is owned by 67 members – 48 from the region. In2012, ADB assistance totaled 21.6 billion USD, including cofinancing of8.3 billion USD.-VNA