MANILA: The Asian Development Bank (ADB) has lowered its economic growth forecasts for developing Asia and the Pacific amid a worsened global outlook.
In a report released here on Wednesday, the ADB predicted that the region’s economy would grow 4.2% this year and 4.6% next year. The ADB had estimated in September that the economy would grow 4.3% in 2022 and 4.9% in 2023.
#ADBNews: Monetary policy tightening by central banks, the Russian invasion of Ukraine, and recurring lockdowns in the PRC are slowing down economic recovery in Developing Asia and the Pacific.
Find out more in ADB’s #ADO2022 supplement: https://t.co/u9eCooQH4s pic.twitter.com/UNz3tNqzwh
— Asian Development Bank (@ADB_HQ) December 14, 2022
The ADB said Monetary policy tightening by central banks globally and in the region, the protracted Russian invasion of Ukraine, and recurring lockdowns in the People’s Republic of China (PRC) are slowing down developing Asia’s recovery from the COVID-19 pandemic. Restrictions under the “zero-COVID” approach, along with a struggling property market, have led to another downgrade of the PRC’s growth outlook.
Also read: ADB assures Pakistan to approve $1.5bln for BRACE
“Asia and the Pacific will continue to recover, but worsening global conditions mean that the region’s momentum is losing some steam as we head into the new year,” said ADB Chief Economist Albert Park. “Governments will need to work together more closely to overcome the lingering challenges of COVID-19, combat the effects of high food and energy prices—especially on the poor and vulnerable—and ensure a sustainable, inclusive economic recovery.”
ADB lowered its forecast for inflation in developing Asia and the Pacific this year to 4.4% from 4.5%. However, the bank raised its projection for next year to 4.2% from 4.0%, due to lingering inflationary pressures from energy and food.
Also read: ADB deposits $1.5 billion at State Bank of Pakistan
The PRC’s economy is forecast to expand by 3.0% this year, compared with a previous projection of 3.3%. The forecast for next year was cut to 4.3% from 4.5%, due to the global slowdown. Gross domestic product growth projections for India were maintained at 7.0% this fiscal year and 7.2% next fiscal year.
Also read: ADB approves $554mn financing package for Pakistan
Even with the downgraded forecasts, developing Asia will still do better than other regions globally, both in terms of growth and inflation. ADB’s growth forecast for Southeast Asia this year was raised to 5.5% from 5.1%, amid robust consumption and tourism recovery in Malaysia, the Philippines, Thailand, and Viet Nam. Projections for next year, however, were lowered to 4.7% from 5.0% due to weakening global demand. The growth forecast for the Caucasus and Central Asia this year was upgraded to 4.8% from 3.9%, while the projection for the Pacific was raised to 5.3% from 4.7%, due to a strong tourism recovery in Fiji.
