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An improving economic growth outlook in both Japan and the USA paired with stronger-than- expected growth in the People’s Republic of China (PRC) support a steady growth outlook for developing Asia, says a new Asian Development Bank (ADB) report. The Asian Development Outlook Supplement, released on Wednesday (11/12), forecasts growth of 6.0 percent in 2013 for ADB’s 45 developing member countries, improving to 6.2 percent in 2014. The forecasts are unchanged from the Asian Development Outlook Update issued in October.
“Despite uncertainties in the global economic environment, developing Asian economies remain resilient. The region has performed well in 2013 and is now poised to benefit from the further signs of growth momentum in the advanced economies,” said ADB Chief Economist Changyong Rhee.
Advanced economies of the US, Euro area and Japan are on track to meet the October forecast of 0.9 percent growth in 2013. ADB expects 1.9 percent growth in these economies in 2014, up 0.1 percentage points from the October forecast.
The outlook for PRC growth is increased by 0.1 percentage points to 7.7 percent in 2013 and 7.5 percent in 2014 on the back of rising infrastructure investment. This boosts the average East Asian forecast by the same magnitude to 6.7 percent for both 2013 and 2014 as indicators in other economies in the subregion are generally in line with October assumptions.
South Asia is on track to meet growth expectations of 4.7 percent in 2013 and 5.5 percent in 2014. After bottoming out in the first fiscal quarter, India’s economy appears to have recovered on the back of a rebound in exports and higher industrial and agricultural outputs. India is anticipated to grow at 4.7 percent in fiscal year 2013 (ending 31 March 2014) and 5.7 percent in fiscal year 2014, unchanged from the October forecast.
A slight moderation is forecast in Southeast Asia. The subregion is expected to post growth of 4.8 percent in 2013 and 5.2 percent in 2014; both forecasts are revised down 0.1 percentage points from October. The moderation stems from the impact of tensions in Thailand on both consumption and tourism. The devastating impact of Typhoon Haiyan is tempering the Philippines’ 2013 growth, but reconstruction is expected to boost growth as it ramps up in 2014.
Growth in Central Asia is gradually recovering, with aggregate projections for the subregion revised up from October forecasts: to 5.7 percent from 5.4 percent for 2013 and to 6.1 percent from 6.0 percent for 2014. The revisions reflect stronger performance in Kazakhstan and Turkmenistan.
Economies in the Pacific are expected to slow from 7.1 percent growth in 2012 to 5.0 percent in 2013 before bouncing back to 5.4 percent in 2014. The projections are 0.2 percentage points lower than in October for 2013 and 0.1 percentage points lower for 2014 as weak international commodity prices are adversely affecting agriculture, mineral, and forestry export earnings of some of the larger Pacific economies such as Papua New Guinea and Solomon Islands.
Expected average inflation in developing Asia remains as forecast in October: 3.6 percent in 2013 and 3.7 percent in 2014.
Click here to download the Asian Development Outlook Supplement December 2013
This article was first published by the Asian Development Bank