A slowdown in China and India is reverberating across the region with the Asian Development Bank forecasting easing expansion this year, putting pressure on policy makers to take steps to bolster their economies.
Developing Asia, which excludes Japan, will probably grow 6 percent in 2013 and 6.2 percent next year, the Manila-based lender said in a report today. In July, it had forecast expansion of 6.3 percent this year and 6.4 percent in 2014.
Slowing growth in two of Asia’s biggest economies is compounded by concern that the Federal Reserve’s impending reduction of its record stimulus will drive investors away from emerging nations and spur volatility in financial markets. The MSCI Asia Pacific Index of regional stocks has gained about 7 percent this year, trailing a 19 percent gain in the Standard & Poor’s 500 Index.
“Asia and the Pacific 2013 growth will come in below earlier projections due to more moderate activity in the region’s two largest economies and effects of quantitative-easing nervousness,” Changyong Rhee, the ADB’s chief economist, said in a statement.
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