Developing Asia faces “intensified” risks from China’s property sector and high interest rates around the world, the Asian Development Bank said in a report yesterday as it trimmed its regional growth expectations.
GDP for developing Asia is forecast to expand 4.7 percent this year, the Manila-based lender said, slightly lower than its April estimate of 4.8 percent.
It was faster than the 4.3 percent growth last year.
Photo: AFP
Developing Asia refers to the multilateral lender’s 46 emerging-member economies, stretching from Kazakhstan in Central Asia to the Cook Islands in the Pacific.
“Risks to the outlook have intensified,” the bank said in its latest update of forecasts for this year and next, adding that weaknesses in China’s property sector could “hold back regional growth.”
Other challenges include high interest rates, threats to food security and export restrictions imposed by some countries.
Inflation is also expected to drop to 3.6 percent this year from 4.4 percent last year, the bank said, pointing to the slowdown in China.
Growth in China would likely be 4.9 percent this year, slower than the 5 percent estimated previously, it said.
Taiwan and South Korea had their economic growth forecasts revised lower due to a deterioration in net exports, the bank said.
Taiwan’s GDP growth was revised down to 1.2 percent from a previous estimate of 2 percent, while South Korea’s was trimmed to 1.3 percent from 1.5 percent.
Taiwan and South Korea had GDP growth of 2.4 percent and 2.6 percent respectively last year.
The bank also cut its growth forecast for India to 6.3 percent from 6.4 percent.
“Public investment in India remains robust and will continue to drive growth there,” the report said. “Domestic demand is similarly strong in other economies in the region.”
Additional reporting by staff writer and Bloomberg
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