Strong exports, consumption fuel growth in Asia: ADB

16 Dec '17

3 min read

Economic expansion in developing Asia will accelerate to 6 per cent in 2017 as stronger than expected exports and domestic consumption fuel growth, the Asian Development Bank (ADB) forecasts. Excluding Asia’s newly industrialised economies, growth is now expected at 6.5 per cent this year, according to a new ADB report.

In a supplement to its Asian Development Outlook Update 2017 report, ADB upgraded its 2017 growth domestic product (GDP) outlook in the region by 0.1 percentage points compared to its September 2017 forecast, while its 2018 forecast remained unchanged at 5.8 per cent, according to an ADB press release.

“Developing Asia’s growth momentum, supported by recovering exports, demonstrates that openness to trade remains an essential component of inclusive economic development,” said Yasuyuki Sawada, ADB’s chief economist.

South Asia will stay the fastest growing of all sub-regions in Asia and the Pacific, despite a downward revision from previous projections from 6.7 per cent to 6.5 per cent in 2017, and is expected to pick up to 7 per cent in 2018. GDP growth in India was revised down to 6.7 per cent in 2017 and 7.3 per cent in 2018.

Combined growth for the major industrial economies was revised upward to 2.2 per cent for 2017 and 2 per cent for 2018 due to robust domestic demand in the euro area, and in Japan due to private investment and net exports. Growth projections for the United States remain unchanged at 2.2 per cent in 2017 and 2.4 per cent in 2018.

By sub-region, growth for East Asia was revised upward to 6.2 per cent in 2017 from 6 per cent, while 2018 projections of 5.8 per cent remain unchanged. Growth prospects in China were revised up on resilient consumption and are now expected to expand by 6.8 per cent in 2017 and 6.4 per cent in 2018.

Growth for Southeast Asia is picking up faster than earlier forecast with GDP set to expand by 5.2 per cent in 2017 and 2018, compared to September 2017 forecasts of 5 per cent and 5.1 per cent. The sub-region is benefiting from stronger investments and exports and robust domestic demand, particularly private consumption and investment, will continue to support growth in the sub-region, said the report.

Growth in Central Asia is expected to reach 3.6per cent in 2017 compared to the 3.3 per cent earlier projected. The 2018 forecasts for the region stay unchanged at 3.9 per cent. (DS)

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