Asian Development Bank Cuts Developing Asia Growth Forecast

The Asian Development Bank on Tuesday trimmed its 2013 growth forecast for developing Asia to 6.3 percent and its 2014 forecast to 6.4 percent, saying continued tepid demand from major industrial economies plus slower growth in China’s economy have dampened growth.

“This has had knock-on effects for other East Asian economies,” the bank said in its Asian Development Outlook supplement, referring to the weaker-than-expected Chinese economy in the first half of this year and tighter credit.

In April, the ADB had predicted the 45 developing members of the bank would grow 6.6 percent this year and 6.7 percent next year.

In the latest report, the bank said, “Although advanced economies have largely met expectations so far in 2013, developing Asia has not achieved the momentum envisaged in the Asian Development Outlook 2013.”

Growth in East Asia was revised down from 7.1 percent to 6.7 percent in both in 2013 and in 2014.

ADB chief economist Changyong Rhee said, “The drop in trade and scaling back of investment are part of a more balanced growth path for China, and the knock-on effect of its slower pace is definitely a concern for the region.”

“But we are also seeing more subdued activity across much of developing Asia,” Rhee said.

The Chinese economy is now forecast to expand 7.7 percent in 2013 and 7.5 percent in 2014. The ADB previously forecast growth of 8.2 percent in 2013 and 8 percent in 2014.

via Mainichi

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