The Asian Development Bank (ADB) has revised down its economic growth forecast for Asia-Pacific in 2013 to 6 percent from 6.6 percent seen in April over softer-than-expected economic activity in China and India and jitters over the United States’ quantitative easing program.
In an update of its flagship annual economic publication, Asian Development Outlook 2013 (ADO 2013), released today, the ADB also lowered its gross domestic product (GDP) growth forecast for the region for 2014, down to 6.2 percent from 6.7 percent in April. In 2012, growth came in at 6.1 percent.
“Asia and the Pacific 2013 growth will come in below earlier projections due to more moderate activity in the region’s two largest economies and effects of QE nervousness,” said ADB chief economist Changyong Rhee in a written statement.
“While economic activity will edge back up in 2014, current conditions highlight the need for the region to exercise vigilance to safeguard financial stability in the short term while accelerating structural reforms to sustain economic growth in the longer term,” he added.
Growth in East Asia is now expected to come in at 6.6 percent for both 2013 and 2014, while in South Asia, GDP is seen to expand by 4.7 percent in 2013 and 5.5 percent in 2014, well below previous projections of 5.7 percent and 6.2 percent, said the ADB.
Southeast Asia’s growth will be crimped by the soft performances of its three biggest economies, with lackluster exports and moderating investment weighing on Indonesia, Thailand, and Malaysia. By contrast, the Philippines is expected to continue to perform strongly.
The sub-region will grow 4.9 percent in 2013, with the pace set to quicken to 5.3 percent in 2014, as it benefits from an investment recovery and firmer exports, supported by improved global trade and recent currency depreciations.
Central Asia, meanwhile, will see growth decelerate to 5.4 percent in 2013 on slower-than-expected economic activity in Kazakhstan and Georgia, before recovering to 6 percent in 2014. The Pacific sub-region will post growth of 5.2 percent and 5.5 percent in 2013 and 2014, unchanged from the April ADO 2013 estimates.