Wed, Dec 15, 2021 page12

• ADB trims Asia growth forecast to 7%

  UNCHANGED: The bank retained its forecast of 6.2% growth for Taiwan this year, with private investment surging 28% last quarter due to chip and 5G investments

  • By Crystal Hsu / Staff reporter
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  The Asian Development Bank (ADB) yesterday trimmed its economic growth outlook for developing Asia this year from 7.1 percent to 7 percent, but kept its forecast for Taiwan unchanged at 6.2 percent, as the nation has fared in line with expectations.

  “The advent of the Omicron virus variant is causing renewed uncertainty... Recovery efforts will have to take these developments into consideration,” ADB acting chief economist Joseph Zveglich Jr said.

  The latest revision came three months after the projection released in September.

  Forecasts for this year have been revised slightly downward for all sub-regions except central Asia, the Manila-based organization said.

  The main risk to growth remains a resurgence in COVID-19 infections, the economist said, adding that new outbreaks last quarter slowed the pace.

  The average number of daily cases worldwide rose to almost 573,000 on Nov. 30, from 404,000 on Oct. 15, it said.

  The full vaccination rate in developing Asia has increased to 48.7 percent, but the region lags behind the US’ 58.1 percent and the EU’s 67.2 percent.

  Rates of fully vaccinated people also vary widely within the region, from 91.9 percent in Singapore to 2.2 percent in Papua New Guinea.

  East Asia’s growth outlook has been cut by 0.1 percentage points to 7.5 percent for this year and 5 percent for next year, mainly due to mild downward adjustments in the forecast for China’s economy, which is now expected to grow 8 percent this year and 5.3 percent next year, ADB said.

  Economic developments in Taiwan have been broadly in line with expectations, ADB said, keeping its growth prediction at 6.2 percent for Taiwan this year and 3 percent next year.

  Economic conditions in Taiwan are expected to improve this quarter, as the government’s new stimulus program should bolster consumer confidence and private expenditure, it said.

  GDP growth reached 6.7 percent in the first three quarters, it said.

  Private investment was the main growth driver last quarter, expanding 28 percent year-on-year, as major semiconductor firms and related supply chain companies stepped up capital expenditure and investment plans for 5G technology, it said.

  Exports continued to surge to meet strong global demand for electronics, although they were outpaced by imports, it added.

  Inflation picked up 1.8 percent in the first 10 months of this year, mainly reflecting spikes in petroleum products and food prices, it said.

  ADB raised its forecast for Taiwan’s inflation for this year from 1.5 percent to 2 percent, as recent price movements turned out faster than expected.

  The regional banking body expects Taiwan’s consumer prices to increase by 1.1 percent next year. Inflation in the region would remain manageable at 2.1 percent this year and 2.7 percent next year, ADB said.
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