Despite some softening in prospects for the major industrialized countries, Asia’s developing economies remain on track to meet growth forecasts made in September by the Asian Development Bank (ADB).
In a supplement to its September 2015 “Asian Development Outlook Update,” ADB kept its earlier growth projections for developing Asia of 5.8% in 2015 and 6.0% in 2016, saying the region’s economies remain resilient to continued economic weakness in industrialized countries.
Moreover, forecasts for the sub-regions are unchanged except for a slight upgrade to growth forecasts for China and minimal downward revisions for Central Asia and the Pacific.
“Although we have seen some softening in a number of economies, the broader regional outlook is for continued steady growth,” said ADB chief economist Shang-Jin Wei.
He said the region’s growth is supported by vibrant private consumption in China and expanded industrial production in India and other countries. However, export-reliant countries will be hurting from the global slump in prices, and the lower growth outlook for the major industrial economies of the U.S., the Euro area, and Japan.
“Sluggish recovery in the US and further contraction of gross domestic product (GDP) in Japan prompt downward revisions in the growth projections for these economies in 2015 and 2016,” said the report.
East Asia’s growth forecast is maintained at 6.0% for 2015 and 2016. China will expand 6.9% this year, slightly more than the 6.8% previously projected, as growth held up well in the first nine months of the year. In 2016 the Chinese economy should expand 6.7%, supported by further growth in consumption and services.
South Asia is on track to meet previous growth projections of 6.9% in 2015 and 7.3% in 2016. Growth in India is expected to pick up further in the second half of fiscal 2015 to reach 7.4% and, in the next fiscal year, 7.8%, boosted by strong industrial production, public capital expenditure, and retail sales. This is helping to offset slowdowns seen for Bhutan, the Maldives, and Nepal.
For Southeast Asia, growth forecasts remain at 4.4% for 2015 and 4.9% for 2016, as the region has managed to maintain its overall growth pace despite marginal downward revisions for Indonesia, the Philippines, and Singapore.
The growth outlook for Central Asia has been downgraded in both 2015 and 2016 to 3.2% and 3.7% from 3.3% and 4.2%, respectively, as low oil and gas prices and the slow recovery in the Russian Federation remain a drag on economic performance.
Pacific economies are also seen posting growth below September estimates, with delays in several large investment projects undermining prospects. For 2015, growth is now seen at 6.3% from 6.7%, and at 3.8% in 2016 from 3.9% previously.
Photo: Stefan Fussan.
