The ADB projects that the region’s economy will grow 4.9% by 2023.
MANILA The Asian Development Bank (ADB), on Wednesday, cut its growth forecasts of developing Asia for 2022-2023 in the face of increasing central bank monetary tightening and the fallout from war in Ukraine.
After previously reducing the forecast to 4.6% for July from 5.2% in April, the ADB now anticipates that the region’s combined economy (which includes China and India) will grow 4.3% in this year.
The ADB projects that the region’s economy will grow 4.9% in 2023, which is slower than its April and July forecasts, of 5.3% and 5.2% respectively. It stated this in September’s flagship Asian Development Outlook report.
Related: ADB will give Pakistan a package of aid and help to get back on its feet.
Albert Park, ADB Chief Economist, stated that “since the April Asian Development Outlook,” many headwinds have strengthened.
“Aggressive tightening by U.S. Federal Reserve Bank and other central banks is reducing global demand and rattling the financial markets.”
He warned that a significant global economic downturn could severely impact the demand for regional exports.
China’s economy is expected to expand by 3.3% in 2018, a decrease of 0.1% from April, when the forecast was cut to 4.0%. According to the ADB, China’s second largest economy will grow 4.5% next fiscal year. This is slower than the previous estimate of 4.8%.
This year’s outlook for sub-regions is mixed. With Central Asia and Southeast Asia expected to grow at 5.1% and 3.9% respectively, it was not as optimistic.
Despite a lower estimate of India’s growth and a Sri Lankan economic crisis, the ADB maintained its South Asia growth forecast at 6.5%.
As supply disruptions continue to drive up fuel and food prices, the Manila-based lender also raised its inflation forecasts.
This year, the average inflation in Asia is expected to be 4.5%. This is up from the 3.7% and 4.2% forecasts for April and July.
Related: The ADB is working on projects worth $2 billion for Pakistan.
Inflation is projected to reach 4.0% in 2023, as opposed to projections of 3.1% and 3.5% for April and July.
