Asian and Pacific economies are predicted to maintain strong growth, albeit with emerging risks, according to a recent report by the Asian Development Bank (ADB). The growth forecast for the region's developing economies has been slightly lowered to 4.7 per cent for 2023, a marginal decrease from the earlier 4.8 per cent prediction.

However, the growth outlook for the coming year remains unchanged at 4.8 per cent, as per the Asian Development Outlook (ADO) report.

The first half of this year saw an encouraging growth spurred by healthy domestic demand and the reopening in China, despite the dampened export demand owing to a weaker global outlook. Furthermore, most economies are experiencing a decline in inflation, which reached its peak last year.

In terms of inflation, the report forecasts a rate of 3.6 per cent for this year in developing Asia and the Pacific, a decline from the earlier estimate of 4.2 per cent, predominantly driven by low inflation rates in China. The inflation outlook for the next year is set at 3.5 per cent.

The ADO report also presented revised growth prospects for various subregions of developing Asia. Southeast Asia's economic outlook has been revised downwards to 4.6 per cent for this year, a 0.1 per cent decrease from the previous forecast, attributed to diminished export demand. Similarly, South Asia's forecast has been lowered by 0.1 percentage points to 5.4 per cent, yet it holds the title of the fastest-growing subregion, a feat achieved through vigorous investment and consumption. East Asia's outlook has been revised to 4.4 per cent, down from 4.6 per cent, with China's growth forecast experiencing a 0.1 per cent cut to 4.9 per cent for this year. On a positive note, growth predictions have seen an uplift for the Caucasus and Central Asia, alongside the Pacific.

“Developing Asia continues growing robustly, and inflation pressures are receding,” said ADB Chief economist Albert Park. “Some central banks in the region have started to lower interest rates, which will help boost growth. Still, governments need to be vigilant against the many risks that the region faces. Property market weakness in China remains a concern. Extreme weather events due to climate change and the effects of El Nino remind us that economies must work together to build resilience and protect the most vulnerable.”

Fibre2Fashion News Desk (DP)

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