Growth forecasts for this year and the next for developing economies in Asia have been cut amid slower-than-expected economic activity in the United States and China, according to a new report from the Asian Development Bank (ADB).
In a supplement to its Asian Development Outlook (ADO) 2015 published last March, ADB projects gross domestic product (GDP) growth in 2015 for Developing Asia to decelerate to 6.1% from the earlier forecast of 6.3%.
In 2016, economic growth for the region is seen to come in at 6.2%, down from 6.3% forecast previously, according to the supplement to the ADO, ADB’s flagship annual economic publication.
“Slower growth in the PRC is likely to have a noticeable effect on the rest of Asia given its size and its close links with other countries in the region through regional and global value chains,” said ADB chief economist Shang-Jin Wei.
Zooming in on specific subregions in Developing Asia, growth projections are revised down for East and Southeast Asia for both 2015 and 2016. In Central Asia and the Pacific, forecasts are unchanged for 2015, but slightly downgraded for 2016. For South Asia, the outlook has been upgraded for 2015 and retained for 2016.
Southeast Asia will see slower-than-previously forecast growth of 4.6% for 2015, weighed down by lower-than-expected first half performances in Indonesia, Singapore, and Thailand. In 2016, the subregional economy is projected to expand 5.1%, below 5.3% estimated earlier.
A general slowdown in East Asia is forecast as a result of ongoing softness in the major industrialized economies (U.S., Japan, Euro Area). Growth is now pegged at 6.2% in 2015, down from 6.5% forecast earlier.
In Central Asia, lower global commodity prices and the recession in the Russian Federation have dampened economic performance, with growth in 2015 seen unchanged at 3.5%, and the forecast revised down to 4.2% from 4.5% for 2016. Pacific economies, meanwhile, will see a strong year in 2015, with growth of 9.9%, supported by Papua New Guinea’s first full year of liquefied natural gas exports. In 2016, growth will fall back to 5% as the one-off boom from the PNG gas exports eases.
After a slow first half, full-year 2015 growth in China is now estimated at 7%, down from 7.2% previously, and will ease further to 6.8% next year. Consumption growth in the country remains robust but investment growth has continued to decelerate.
In India, growth forecasts remain unchanged at 7.8% in fiscal year (FY) 2015 and 8.2% in FY2016, supported by a healthy monsoon and new investments. South Asia as a whole is now expected to grow 7.3% in 2015, up slightly from 7.2% seen earlier. In 2016, growth for the subregion is expected to expand to 7.6%.
Photo: Juthani1
