Economic growth in the Asia-Pacific region is expected to remain strong, although risks to the outlook are increasing, according to a report by the Asian Development Bank (ADB).
Important points
The Asian Development Bank has cut its growth forecast for developing Asia, citing China’s real estate crisis and high interest rates, posing risks to the region’s economy. A slump in China’s real estate sector is weighing on regional growth prospects, while rising global interest rates are increasing risks to economic growth. Thailand’s growth forecast for 2023 has been revised upward from 3.3% to 3.5%, and is expected to remain at 3.7% in 2024.
According to the Asian Development Outlook (ADO) September 2023 released today, the region’s developing countries are expected to grow at 4.7% this year, a slight downward revision from the previous forecast of 4.8%.
According to the Asian Development Bank (ADB), growth in Southeast Asia is expected to slow due to a decline in export demand. ADB has lowered its growth forecast for the region this year to 4.6% from its previous forecast of 4.7%. Vietnam, which is highly dependent on trade, also saw its growth forecast for this year lowered from 6.5% to 5.8%.
Developing countries in Asia continue to grow steadily and inflationary pressures are receding.
ADB Chief Economist Albert Park said.
The report highlights that despite weak global export demand, positive growth was achieved in the first half of this year, driven by domestic demand and the restart of China’s economy.
However, weakness in China’s real estate sector, high global interest rates, supply disruptions, and El Niño-induced drought and flood risks could impact economic growth. Inflation in the region is expected to be 3.6% this year, revised down from the previous forecast of 4.2%.
While Southeast Asia’s growth outlook has been revised downwards due to weaker export demand, South Asia remains the fastest growing region. The report highlights the need for governments to address risks and build resilience. ADB is committed to achieving prosperity and sustainability in the Asia-Pacific region.
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ADB is committed to a prosperous, inclusive, resilient, and sustainable Asia-Pacific region while continuing its efforts to eradicate extreme poverty.
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