The Asian Development Bank (ADB) has lowered its economic growth forecasts for developing Asia and the Pacific amid a worsening global outlook.
A supplement to the Asian Development Outlook 2022 released in Manila on Wednesday expected the region's economy to grow by 4.2 percent this year and 4.6 percent next year, lower than its previous forecast in September at 4.3 percent and 4.9 percent, respectively.
The report said monetary policy tightening by central banks globally and in the region, the protracted Russian invasion of Ukraine, and recurring lockdowns in China are slowing down developing Asia’s recovery from the COVID-19 pandemic.
Restrictions under the “zero-COVID” approach, along with a struggling property market, have led to another downgrade of the China's growth outlook, reads the ADB press statement. “Asia and the Pacific will continue to recover, but worsening global conditions mean that the region’s momentum is losing some steam as we head into the new year,” said ADB Chief Economist Albert Park.
“Governments will need to work together more closely to overcome the lingering challenges of COVID-19, combat the effects of high food and energy prices—especially on the poor and vulnerable—and ensure a sustainable, inclusive economic recovery.”
ADB lowered its forecast for inflation in developing Asia and the Pacific this year to 4.4% from 4.5%. However, the bank raised its projection for next year to 4.2% from 4.0%, due to lingering inflationary pressures from energy and food.
China’s economy is forecast to expand by 3.0% this year, compared with a previous projection of 3.3%. The forecast for next year was cut to 4.3% from 4.5%, due to the global slowdown. Gross domestic product growth projections for India were maintained at 7.0% this fiscal year and 7.2% next fiscal year.
ADB’s growth forecast for Southeast Asia this year was raised to 5.5% from 5.1%, amid robust consumption and tourism recovery in Malaysia, the Philippines, Thailand, and Viet Nam. Projections for next year, however, were lowered to 4.7% from 5.0% due to weakening global demand. The growth forecast for the Caucasus and Central Asia this year was upgraded to 4.8% from 3.9%, while the projection for the Pacific was raised to 5.3% from 4.7%, due to a strong tourism recovery in Fiji.