The Asian Development Bank (ADB) has trimmed its forecasts for economic growth in developing Asia this year and next year as growth in the People’s Republic of China (PRC) and India is weighed down by both external and domestic factors.
In a supplement to its Asian Development Outlook 2019 Update released in September, ADB now expects gross domestic product (GDP) in the region to expand 5.2 per cent in both 2019 and 2020, down from the September forecast of 5.4 per cent growth this year and 5.5 per cent next year.
“While growth rates are still solid in developing Asia, persistent trade tensions have taken a toll on the region and are still the biggest risk to the longer-term economic outlook,” ADB chief economist Yasuyuki Sawada said, adding that domestic investment is also weakening in many countries, as business sentiment has declined. “Inflation, on the other hand, is ticking up on the back of higher food prices, as African swine fever has raised pork prices significantly.”
The supplement forecasts inflation of 2.8 per cent in 2019 and 3.1 per cent in 2020, up from the September prediction that prices would rise by 2.7 per cent this year and next.
Hong Kong, China, already in technical recession, will see severe downward pressures persist possibly into 2020. The economy is now expected to contract by 1.2 per cent this year and grow by 0.3 per cent next year.
In South Asia, India’s growth is now seen at a slower 5.1 per cent in fiscal year 2019 as the foundering of a major nonbanking financial company in 2018 led to a rise in risk aversion in the financial sector and a credit crunch. Also, consumption was affected by slow job growth and rural distress aggravated by a poor harvest. Growth should pick up to 6.5 per cent in fiscal year 2020 with supportive policies. In September, ADB forecast India’s GDP to grow by 6.5 per cent in 2019 and 7.2 per cent in 2020.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members, 49 from the region.
In a supplement to its Asian Development Outlook 2019 Update released in September, ADB now expects gross domestic product (GDP) in the region to expand 5.2 per cent in both 2019 and 2020, down from the September forecast of 5.4 per cent growth this year and 5.5 per cent next year.
“While growth rates are still solid in developing Asia, persistent trade tensions have taken a toll on the region and are still the biggest risk to the longer-term economic outlook,” ADB chief economist Yasuyuki Sawada said, adding that domestic investment is also weakening in many countries, as business sentiment has declined. “Inflation, on the other hand, is ticking up on the back of higher food prices, as African swine fever has raised pork prices significantly.”
The supplement forecasts inflation of 2.8 per cent in 2019 and 3.1 per cent in 2020, up from the September prediction that prices would rise by 2.7 per cent this year and next.
Hong Kong, China, already in technical recession, will see severe downward pressures persist possibly into 2020. The economy is now expected to contract by 1.2 per cent this year and grow by 0.3 per cent next year.
In South Asia, India’s growth is now seen at a slower 5.1 per cent in fiscal year 2019 as the foundering of a major nonbanking financial company in 2018 led to a rise in risk aversion in the financial sector and a credit crunch. Also, consumption was affected by slow job growth and rural distress aggravated by a poor harvest. Growth should pick up to 6.5 per cent in fiscal year 2020 with supportive policies. In September, ADB forecast India’s GDP to grow by 6.5 per cent in 2019 and 7.2 per cent in 2020.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members, 49 from the region.
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