By The Nation
Excluding Asia’s newly industrialised economies, growth is now expected at 6.5 perr cent this year, according to a new ADB report.
In a supplement to its Asian Development Outlook Update 2017 report, ADB upgrades 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 remains unchanged at 5.8 per cent. An unexpectedly strong expansion in Central, East and Southeast Asia has offset a downward adjustment in South Asia.
“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. “Countries can further take advantage of the global recovery by investing in human capital and physical infrastructure that will help sustain growth over the long-term.”
Combined growth for the major industrial economies is 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 subregion, growth for East Asia is revised upward to 6.2 per cent in 2017, from 6 per cent, while 2018 projections of 5.8 per cent are unchanged. Growth prospects in the People’s Republic of China (PRC) have been revised up on resilient consumption. Growth in the PRC is now expected to expand by 6.8 per cent in 2017 and 6.4 per cent in 2018.
South Asia will remain the fastest growing of all subregions 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 is revised down to 6.7 per cent in 2017 and 7.3 per cent in 2018.
Although the strong manufacturing expansion helped the economy reverse 5 consecutive quarters of deceleration in the second quarter of fiscal year 2017, the recovery is more subdued than assumed earlier due to rising crude oil prices, soft private investment growth, and weather-related risks to agriculture.
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 subregion is benefiting from stronger investments and exports, with accelerating growth for Brunei Darussalam, Malaysia, the Philippines, Singapore, and Thailand. Infrastructure investment continued to play an important role in Indonesia, the Philippines, and Thailand. Robust domestic demand – particularly private consumption and investment –will continue to support growth in the subregion, according to the report.