ADB boosts developing Asia’s growth outlook to 4.9%

 

Indicator	ADB’s 12/2023 forecast
Economic Growth (%)	4.9%
China’s Growth (%)	5.2%
India’s Growth (%)	6.7%
Southeast Asia Forecast (%)	4.3%
Inflation (%)	3.6%

 

According to the December 2023 Asian Development Outlook (ADO) report by the Asian Development Bank (ADB), developing economies in the Asia-Pacific region are expected to grow by 4.9%, a slight increase from the previous forecast of 4.7% in September. This adjustment is primarily attributed to stronger-than-anticipated domestic demand in China and India. The growth forecast for the next year remains stable at 4.8%.

 

China’s Economic Expansion:

China’s economy is projected to grow by 5.2% this year, up from the initial estimate of 4.9%, driven by increased household consumption and public investment, particularly in the third quarter.

 

India’s Growth Outlook:

India’s growth outlook has been revised upward to 6.7% from 6.3%, following a faster-than-expected expansion in the July-September period, fueled by a significant increase in industrial output.

 

Southeast Asia’s Reduced Projection:

Positive adjustments in China and India have more than compensated for the reduced growth forecast in Southeast Asia, which is now projected at 4.3% compared to the previous estimate of 4.6%, attributed to a downturn in manufacturing export demand.

 

Inflation Outlook:

 The region’s inflation outlook for the current year has been slightly reduced to 3.5%, down from the earlier projection of 3.6%. However, for the next year, inflation is expected to marginally increase to 3.6%, compared to the previous forecast of 3.5%.

 

 Regional Subgroups:

The outlook for economies in the Caucasus and Central Asia has been raised marginally, while projections for the Pacific economies remain unchanged.

 

Potential Risks:

The ADB’s report highlights potential risks to the economic outlook, including the possibility of persistent high-interest rates in the US and other advanced economies, leading to financial instability in more vulnerable economies with high debt levels. Additionally, potential supply disruptions due to factors like the El Nino weather pattern or the ongoing conflict in Ukraine could trigger a resurgence in inflation, especially in the food and energy sectors.

 

Conclusion:

 Despite facing challenges, the economic prospects of the Asia-Pacific region are experiencing growth, driven by robust demand from China and India. Nevertheless, there are risks associated with high interest rates in developed economies and supply uncertainties due to factors such as El Niño weather patterns or ongoing conflicts in Ukraine. Economic stability policies and measures are key to sustaining positive development in the future.

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