ADB lowers 2016 growth forecast for developing Asia

The Asian Development Bank slightly lowered its 2016 growth forecast for developing Asia on Tuesday, reflecting slower-than-expected expansion in India.
“Asian economies continue their robust expansion in the face of global economic uncertainties,” said ADB Deputy Chief Economist Juzhong Zhuang.
“Structural reforms to boost productivity, improve investment climate, and support domestic demand can help maintain growth momentum,” said Zhuang.
Combined growth for the major industrial economies exceeded expectations in the Update, ticking up 0.1 percentage point to 1.5 percent in 2016. Growth in 2017 is maintained at 1.8 percent. Robust consumer spending supported the US economy, with supportive monetary policy and improved labor markets fueling growth in the euro area. Japan’s expansion, meanwhile, will be buoyed by strong exports, despite the stronger local currency.
Developing Asia, which groups 45 countries in the Asia-Pacific region, is now expected to expand 5.6 percent this year, rather than 5.7 percent, the ADB said in a supplement to its Asian Development Outlook 2016.
The ADB trimmed its 2016 growth estimate for India to 7.0 percent from 7.4 percent due to weak investment, agricultural slowdown and the government’s recent demonetization.
But India’s growth forecast for 2017 was kept at 7.8 percent. Growth in China — the world’s second largest economy — is expected to hit 6.6 percent this year, driven by strong domestic consumption, solid wage growth, urban job creation and public infrastructure investment. The forecast for China in 2017 is maintained at 6.4 percent.
The growth estimate for Southeast Asia was kept at 4.5 percent for this year and 4.6 percent in 2017, supported by strong growth in Malaysia and the Philippines.
Economies in South Asia are projected to expand by 6.6 percent in 2016, down from the previous estimate of 6.9 percent. For next year, growth in that region will bounce back to 7.3 percent, the ADB said.
The Pacific will see growth of 2.7 percent in 2016, picking up to 3.3 percent in 2017. The fiscal contraction in Papua New Guinea — the Pacific’s largest economy — and recovery from recent cyclones have weighed on growth in the sub-region. While cyclone damage in Fiji has had a bigger impact on its growth outlook than previously envisaged, prospects for Samoa, Kiribati, and Tuvalu are improving through improvements in fisheries, infrastructure, and tourism.

Source: Arab News