Rate hikes, war in Ukraine, troubles in China weaken growth prospects for Asia – ADB

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MANILA: The Asian Development Bank (ADB) lowered its growth forecasts for Asia’s development for 2022 and 2023 on Wednesday amid mounting risks from increased central bank monetary tightening, the fallout from the war in Ukraine and COVID-19 lockdowns in China.

The ADB now expects the combined economy of the area, which includes China and India, to grow by 4.3 percent this year, having previously revised its forecast to 4.6 percent in July from 5.2 percent in April.

For 2023, the ADB expects the region’s economy to grow by 4.9 percent, slower than forecasts of 5.3 percent and 5.2 percent in April and July respectively, the ADB said in the September issue of its flagship Asian Development. Outlook report.

“Several headwinds have intensified since the April Asian Development Outlook,” said ADB chief economist Albert Park.

More aggressive tightening by the US Federal Reserve and other central banks is denting global demand and rattling financial markets.

A significant global economic downturn would seriously undermine demand for the region’s exports, he warned.

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The Chinese economy is likely to grow by 3.3 percent this year, a further decline after the forecast was previously cut from 5.0 percent in April to 4.0 percent. The ADB expects the world’s second largest economy to grow by 4.5 percent next year, slower than a previous estimate of 4.8 percent.

The outlook for the sub-regions remained mixed this year, with Southeast Asia and Central Asia expected to grow faster than previously forecast at 5.1 percent and 3.9 percent, respectively.

However, the ADB maintained its growth forecast for South Asia at 6.5 percent, despite a lower growth forecast for India and an economic crisis in Sri Lanka.

At the same time, the Manila-based lender has raised its inflation forecasts in the region as supply disruptions continue to push up food and fuel prices.

Average inflation in emerging Asia is expected to be 4.5 percent this year, up from forecasts of 3.7 percent and 4.2 percent in April and July, respectively.

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Inflation will rise to 4.0 percent for 2023, compared to forecasts of 3.1 percent in April and 3.5 percent in July.

GDP GROWTH 2021 2022 2022 2022 2023 2023 2023

APR JULY SEPT APR JULY SEPT

Central Asia 5.7 3.6 3.8 3.9 4.0 4.1 4.2

East Asia 7.7 4.7 3.8 3.2 4.5 4.5 4.2

China 8.1 5.0 4.0 3.3 4.8 4.8 4.5

South Asia 8.1 7.0 6.5 6.5 7.4 7.1 6.5

India 8.7 7.5 7.2 7.0 8.0 7.8 7.2

Southeast Asia 3.3 4.9 5.0 5.1 5.2 5.2 5.0

Indonesia 3.7 5.0 5.2 5.4 5.2 5.3 5.0

Malaysia 3.1 6.0 5.8 6.0 5.4 5.1 4.7

Myanmar -5.9 -0.3 N/A 2.0 2.6 N/A 2.6

Philippines 5.7 6.0 6.5 6.5 6.3 6.3 6.3

Singapore 7.6 4.3 3.9 3.7 3.2 3.2 3.0

Thailand 1.5 3.0 2.9 2.9 4.5 4.2 4.2

Vietnam 2.6 6.5 6.5 6.5 6.7 6.7 6.7

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The Pacific Ocean -1.5 3.9 4.7 4.7 5.4 5.4 5.5

Asia developing 7.0 5.2 4.6 4.3 5.3 5.2 4.9

INFLATION

APR JULY SEPT APR JULY SEPT

Central Asia 8.9 8.8 11.3 11.5 7.1 8.1 8.5

East Asia 1.1 2.4 2.3 2.5 2.0 2.1 2.5

China 0.9 2.3 2.1 2.3 2.0 2.0 2.5

South Asia 5.8 6.5 7.8 8.1 5.5 6.6 7.4

India 5.5 5.8 6.7 6.7 5.0 5.8 5.8

Southeast Asia 2.0 3.7 4.7 5.2 3.1 3.4 4.1

Indonesia 1.6 3.6 4.0 4.6 3.0 3.3 5.1

Malaysia 2.5 3.0 2.7 2.7 2.5 2.5 2.5

Myanmar 3.6 8.0 N/A 16.0 8.5 N/A 8.5

Philippines 3.9 4.2 4.9 5.3 3.5 4.3 4.3

Singapore 2.3 3.0 4.7 5.5 2.3 2.3 2.3

Thailand 1.2 3.3 6.3 6.3 2.2 2.7 2.7

Vietnam 1.8 3.8 3.8 3.8 4.0 4.0 4.0

Pacific Ocean 3.1 5.9 5.9 6.2 4.7 4.7 4.8

Asia developing 2.5 3.7 4.2 4.5 3.1 3.5 4.0

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