Challenge for Asia to maintain growth momentum - ADB
MANILA, Philippines: Continued tepid demand from the major industrial
economies coupled with slower growth in the People's Republic of China
(PRC) are weighing on the outlook for developing Asia, said a new Asian
Development Bank (ADB) report.
The latest Asian Development Outlook Supplement released recently
trimmed the 2013 growth forecast for the 45 developing member countries
of ADB to 6.3% and cut its 2014 forecast to 6.4%. In April, ADB had
predicted the region to grow 6.6% this year and 6.7% next year. "The
drop in trade and scaling back of investment are part of a more balanced
growth path for PRC, and the knock-on effect of its slower pace is
definitely a concern for the region. But we are also seeing more subdued
activity across much of developing Asia," said ADB, Chief Economist
Changyong Rhee.
The PRC, home to developing Asia's largest economy, is likely to see
its economy expand 7.7% this year and 7.5% in 2014 after growth of 7.8%
in 2012. The report said that import and export growth has slowed given
weak external demand, but noted continuing robust consumer confidence.
Slower growth in the PRC has subdued the outlook for the entire East
Asia region, and to a lesser extent, for Southeast Asia, where the
Philippines and other large ASEAN countries are otherwise seeing solid
growth.
In India, meanwhile, slow progress in pushing through the reforms
needed to ease business bottlenecks means growth is likely to be 5.8%
this year, slower than the previously forecast 6.0%. ADB maintains its
2014 forecast of 6.5% for 2014.
Elsewhere in South Asia, Sri Lanka continues to grow strongly while
other parts of the region will see softer than anticipated growth. The
report has also trimmed forecasts for Central Asia, reflecting the
sluggish economic performance of Kazakhstan and Georgia, and for the
Pacific where Timor-Leste is seeing a slowdown in government spending.
Inflation pressures are waning on the back of declining energy and food
prices, given slower global demand for fuels and bumper grain harvests.
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