DILI, 21 september 2023 (TATOLI)—The Asian Development Bank (ADB) has released another report stating that economic growth in Asia and the Pacific is expected to remain solid, although risks to the outlook are increasing.
The Asian Development Outlook September 2023 forecasts the region’s developing economies to grow 4.7 percent this year, a slight downward revision from a previous projection of 4.8 percent. The growth forecast for next year is maintained at 4.8 percent.
Growth in the region was upbeat in the first half of the year, driven by healthy domestic demand and the reopening of markets in the People’s Republic of China (PRC), although a weaker global outlook dampened export demand.
It said recovering tourism, a resilient services sector, healthy money transfers to the region, and improving financial conditions were all helping to support economic activity, and inflation was declining in most countries after peaking last year.
However, weakness in the PRC’s property sector weighed on the regional outlook. High global interest rates have increased the risk of financial instability. Sporadic supply disruptions from Russia’s ongoing invasion of Ukraine, export restrictions, and the increased risk of drought and floods caused by El Niño could once again trigger rising food prices and challenge food security.
“Developing countries in Asia continue to grow strongly, and inflationary pressures are starting to ease. Some central banks in the region have begun to lower interest rates, which will help boost growth. However, governments must remain alert to the various risks facing the region, ” said ADB Chief Economist, Albert Park.
“The weakness of the property market in the PRC remains a concern. Extreme weather events due to climate change and the impact of El Nino remind us that economies must work together to build resilience and protect the most vulnerable.”
Inflation in developing Asia and the Pacific is expected to reach 3.6% this year, down from the previous projection of 4.2%. This is largely due to low inflation in the PRC, along with stable food and energy prices. The inflation forecast for next year is 3.5%.
Among emerging Asian sub-regions, Southeast Asia’s growth forecast was cut to 4.6% this year from the previous projection of 4.7%, due to weaker export demand.
The projection for South Asia was also lowered by 0.1 percentage point, to 5.4% – although it remains the fastest growing subregion, thanks to strong investment and consumption.
The outlook for East Asia was cut to 4.4% from 4.6%, with the PRC now expected to grow 4.9% this year, from 5.0% in April. Growth forecasts were also raised for the Caucasus and Central Asia, as well as the Pacific.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while maintaining its efforts to eradicate extreme poverty. Founded in 1966, ADB has 68 members – 49 countries in the region.
Journalist: Jose Belarmino de Sa
Editor: Nelia B.
