China's slowdown contributes to cut in ADB's growth forecast

 

 

In April, ADB had predicted the region to grow 6.6 per cent this year and 6.7 per cent next year.

“The drop in trade and scaling back of investment are part of a more balanced growth path for PRC, and the knock-on effect of its slower pace is definitely a concern for the region. But we are also seeing more subdued activity across much of developing Asia,” said ADB Chief Economist Changyong Rhee.

Yesterday, China announced the second-quarter GDP, which weakened to 7.5 per cent. 

China's -  home to developing Asia’s largest economy - is likely to see its economy expand 7.7 per cent this year and 7.5 per cent in 2014 after growth of 7.8 per cent in 2012. The latest Asian Development Outlook report notes that import and export growth has slowed given weak external demand, but notes continuing robust consumer confidence. Slower growth in China has subdued the outlook for the entire East Asia region, as well as, to a lesser extent, for Southeast Asia, where the Philippines and other large Asean countries are otherwise seeing solid growth.

In India, meanwhile, slow progress in pushing through the reforms needed to ease business bottlenecks means growth is likely to be 5.8 per cent this year, slower than the previously forecast 6.0 per cent. ADB maintains its 2014 forecast of 6.5 per cent for 2014. 

Inflation pressures, meanwhile, are waning on the back of declining energy and food prices, given slower global demand for fuels and bumper grain harvests.