Fri, Jul 17, 2015 page15

• China, developing Asia forecasts cut

  ADB OUTLOOK: The Manila-based institution said that China’s slower growth this year and next is likely to have a noticeable impact on other nations in the region

  • AFP, MANILA
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  The Asian Development Bank (ADB) yesterday trimmed its growth forecasts for China and developing Asia this year and next owing to weakness the world’s No. 2 economy.

  However, it said a pick-up in investment and the removal of red tape in India’s economy would continue to boost growth in the country, but urged New Delhi must continue with its reforms.

  After a slow first half, full-year GDP growth in China is now estimated at 7 percent this year and 6.8 percent next year, the Manila-based lender said in a statement.

  

  A tricycle rides over the furs of raccoon dogs at a fur market in Jiaxing, Chongfu County, China, on Tuesday.

  Photo: Reuters

  That compares with its March estimate of 7.2 percent this year and 7 percent next year.

  “Slower growth in [China] is likely to have a noticeable effect on the rest of Asia, given its size and its close links with other countries in the region,” ADB chief economist Wei Shangjin (魏尚進) said.

  Weaker-than-expected external demand, a declining working-age population and rising wages were all factors in the slowing growth of the economic powerhouse, he added.

  Beijing on Wednesday said its economy grew 7 percent from April to last month, the same as the previous three months and in line with its target for the year.

  However, that would mark the slowest pace since 1990, a year after the Tiananmen Square crackdown.

  Developing Asia as a whole is now expected to grow 6.1 percent this year and 6.2 percent next year, the ADB said, slower than the 6.3 percent previously predicted for each year.

  Softness in major industrialized economies should lead to growth in East Asia to ease to 6.2 percent this year instead of 6.5 percent, the bank said.

  It did not say if its next year’s forecast of 6.3 percent growth for the sub-region was changed.

  For Taiwan, this year’s GDP growth may slow to 3.4 percent instead of 3.7 percent, with modest growth of 3.6 percent for next year.

  South Korea was tipped by the ADB to grow 3 percent this year, down from a previous forecast of 3.5 percent. Next year, the ADB estimates its economy will expand 3.5 percent, 0.2 percentage points down from March’s estimate.

  Hong Kong was predicted to grow 2.6 percent this year and 2.9 percent next year, while Singapore is seen growing 2.8 percent this year and 3.4 percent next year.

  Forecasts for India were unchanged at 7.8 percent this year and 8.2 percent next year, backed by a healthy monsoon and new investments.

  Growth next year will be driven by continued service-sector expansion and “the removal of procedural bottlenecks that have hampered investment,” the bank said, adding that “risks to growth prospects could emerge from further delay in passing some legislation crucial to easing land acquisition for industry and to implementing a uniform goods and services tax.”

  India’s advance would help South Asian growth rise to 7.3 percent this year instead of 7.2 percent, with better-than-expected growth in Bangladesh balancing a quake-induced slowdown in Nepal, the bank said, adding that the sub-region should grow 7.6 percent next year, unchanged from March’s forecast.

  Southeast Asia’s growth forecast was cut to 4.6 percent this year from 4.9 percent, and 5.1 percent next year from 5.3 percent.

  Lower global commodity prices and the Russian recession will dampen growth in Central Asia, with next year’s growth cut to 4.2 percent from 4.5 percent, though this year’s forecast of 3.5 percent was unchanged, the bank said.

  Additional reporting by staff writer

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