The Asian Development Bank (ADB) yesterday said it has lowered its growth forecasts for developing Asia for this year and next year, as a weaker outlook for China and India indicated softer economic activity elsewhere in the region.
The bank trimmed its growth forecast for developing Asia to 5.2 percent for this year and next year, the Manila-based lender said in an updated annual outlook report, from 5.4 percent and 5.5 percent previously.
ADB cut its growth estimates for China for this year and next to 6.1 percent and 5.8 percent respectively, from the 6.2 percent and 6 percent forecasts announced in September, in light of the US-China trade tensions and as higher prices of pork cut into consumer spending.
“While growth rates are still solid in developing Asia, persistent trade tensions have taken a toll on the region and are still the biggest risk to the longer-term economic outlook,” ADB chief economist Yasuyuki Sawada said. “Inflation, on the other hand, is ticking up on the back of higher food prices, as African swine fever has raised pork prices significantly.”
The ADB also lowered its forecast for India to 5.1 percent this year and 6.5 percent next year, from its September estimates of 6.5 percent and 7.2 percent, due to liquidity strains on its nonbanking finance companies and slow job growth.
Southeast Asia’s growth this year is expected to be slightly lower than previously expected, as trade-reliant economies like Singapore and Thailand are hit hard by the trade war and broader global slowdown.
Developing Asia faces rising food costs, with inflation seen at 2.8 percent for this year and 3.1 percent next year.
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