Asian Development Bank Lowers Asia Forecast

The Asian Development Bank (ADB) has cut its growth forecast for Asia for this year and next, as economic problems in Europe and the US hurt developing countries.

The lender projects that Asia, excluding Japan, will expand by 6.1% this year, down from a July estimate of 6.6%.

It also forecast inflation would be 4.2% rather than 4.4%.

The ADB said countries in Asia must reduce their dependency on exports.

It singled out slowing growth in China and India, two of the biggest economies in the region, as the main driver of the revision.

“Deceleration in the region’s two giants, the People’s Republic of China and India, and in other major exporting economies is tempering earlier optimism,” the ADB said.

“The ongoing sovereign debt crisis in the euro area and the looming fiscal cliff in the US pose major risks to the outlook.”

Data out this week supported the ADB’s gloomy outlook.

Manufacturing in China showed a contraction for the second month in a row, Japanese industrial companies have become more pessimistic on their prospects and South Korean exports have fallen.

via BBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza