Developing Asia is forecast to maintain strong but moderating growth over 2019 and 2020, as supportive domestic demand counteracts an environment of global trade tensions, said a new Asian Development Bank (ADB) report released on Thursday.
In a supplement to its Asian Development Outlook published in April, ADB maintains growth forecasts for developing Asia at 5.7 percent in 2019 and 5.6 percent in 2020, unchanged from its April forecast, agency reports. The Asian Development Outlook is ADB’s flagship economic yearly publication.
“Even as the trade conflict continues, the region is set to maintain strong but moderating growth,” said ADB Chief Economist Yasuyuki Sawada. The ongoing trade conflict is now having “discernible effects on regional investment and trade patterns,” the report says.
The Manila-based bank said growth for the subregion’s largest economy, China, is also unchanged, with forecasts of 6.3 percent in 2019 and 6.1 percent in 2020, as policy support offsets softening growth in domestic and external demand.
The growth outlook for East Asia in 2019 has been revised down to 5.6 percent because of slower than expected activity in South Korea. The subregion’s growth outlook of 5.5 percent for 2020 is unchanged from April.
In South Asia, the report says the economic outlook is robust, with growth projected at 6.6 percent in 2019 and 6.7 percent in 2020, albeit lower than forecast in April. The growth outlook for India has been cut to 7.0 percent
in 2019 and 7.2 percent in 2020 because the fiscal 2018 outturn fell short. The outlook for Southeast Asia has been downgraded slightly to 4.8 percent in 2019 and 4.9 percent in 2020 due to the trade impasse and a slowdown in the electronics cycle.
In Central Asia, the growth outlook for 2019 has been revised up to 4.3 percent on account of an improved outlook for Kazakhstan. Central Asia’s growth outlook of 4.2 percent for 2020 is unchanged from April.
The growth outlook in the Pacific, 3.5 percent in 2019 and 3.2 percent in 2020, is unchanged, as the subregion continues to rebound from the effects of Cyclone Gita and an earthquake in Papua New Guinea, the subregion’s largest economy.
Developing Asia’s inflation projections were revised up from 2.5 percent to 2.6 percent for both 2019 and 2020, reflecting higher oil prices and various domestic factors.
Established in 1966, the ADB has 68 members, including 49 from within the Asia-Pacific region.