14 June 2022 (closed)
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In its latest report entitled ‘Growth Hesitates in Developing Asia’ (which is a supplement to the ‘Asian Development Outlook 2014 Update’), the Asian Development Bank (ADB) slightly downgraded economic growth in developing Asia to 6.1 percent (y/y) in 2014 from its September estimate of 6.2 percent (y/y). Despite slowing momentum the ADB believes that current low oil prices constitute a great opportunity for Asian countries to conduct structural reforms as many of these countries are net oil importers.
ADB's GDP Growth Outlook Developing Asia:
Source: Asian Developing Bank
ADB Chief Economist Shang-Jin Wei said that low oil prices can fuel accelerated economic growth of developing Asia after softer-than-expected economic performance in the first three quarters of 2014. The positive impact of these low oil prices will be really felt in 2015 as governments have more fiscal space for structural investments (by reducing costly fuel subsidies). Moreover, most Asian developing economies have revised down inflation targets due to falling oil (and other commodity) prices.
Growth forecasts for the advanced economies - which involve the USA, Eurozone, and Japan - have been revised down slightly to 1.4 percent (y/y) in 2014 due to the weak economic performance of Japan in the third quarter of 2014. Economic performance of these countries will pick up in 2015 to 2.1 percent (y/y) according to the ADB.
The economic slowdown in China, the world’s second-largest economy, is expected to continue into the last quarter of 2014 amid the country’s continued real estate market correction and the spill over effect to related sectors, such as construction. GDP growth in China is forecast at 7.4 percent (y/y) in 2014 (down from the previous 7.5 percent y/y estimate).