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Economic activity continued to expand even as inflation slowed, with healthy domestic demand, strong remittances, and a recovery in tourism supporting economic activity. These factors are expected to continue to drive growth in the region in 2024, offsetting the impact of weaker export performance and slower monetary policy tightening. Downside risks are primarily related to the persistence of high long-term interest rates in developed countries. Potential supply disruptions due to El Niño and Russia’s invasion of Ukraine could renew energy and food security challenges and reignite inflation.
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Despite global challenges, the outlook for Asia’s developing countries remains strong. The growth forecast for 2023 has been revised upward from 4.7% in the September 2023 Asia Development Outlook forecast to 4.9%, due to strong domestic demand. The forecast for 2024 remains unchanged at 4.8%. Her 2023 growth forecast for East Asia was revised upward to her 4.7% after the People’s Republic of China’s third-quarter growth was better than expected. The outlook for 2024 remains unchanged at 4.2%. Growth forecasts for South Asia are revised upward to 5.7% for 2023 and unchanged at 6.0% for 2024 due to stronger-than-expected growth in India. Growth forecasts for Southeast Asia have been revised downward to 4.3% in 2023 and 4.7% in 2024. This is mainly due to the slump in external demand. The outlook for Caucasus and Central Asia in 2023 has improved, with growth expected to be 4.8%, mainly due to expectations for faster growth in Kazakhstan. The forecast for 2024 has been revised slightly downward to 4.6%. Growth forecasts for the Pacific region remain unchanged at 3.5% in 2023 and 2.9% in 2024 due to the continued recovery in international tourism and the resumption of public infrastructure projects. Inflation in developing Asia is expected to fall to a downwardly revised 3.5% this year from 4.4% last year, before rising slightly to 3.6% in 2024. Downside risks are primarily related to higher long-term interest rates in developed countries, which could lead to higher inflation. cause financial instability. Potential supply disruptions from El Niño and Russia’s invasion of Ukraine could renew energy and food security challenges and reignite inflation.
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