Steady growth for region: ADB
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The growth outlook for developing Asia remains steady, even though momentum slowed in the second half of 2014, but declining oil prices represent a golden opportunity for many beneficial reforms, the Asian Development Bank says in a new report.
In a supplement to its “Asian Development Outlook 2014 Update”, the ADB forecasts that the region’s gross domestic product will post growth of 6.1 per cent this year, down from 6.2 per cent expected in September, and 6.2 per cent in 2015, down from 6.4 per cent.
The combined GDP of the 45 ADB developing member countries grew by 6.1 per cent in 2013. Growth projections for Central, East and Southeast Asia are revised downwards. There is no change for South Asia. The Pacific region’s growth outlook is adjusted upwards.
“While growth in the first three quarters of this year [was] somewhat softer than we had expected, declining oil prices may mean an upside surprise in 2015, as most economies are oil importers,” said ADB chief economist Shang-Jin Wei.
Recovery in the major industrial economies of the United States, the euro area and Japan has been revised down slightly since the Update, as weak third-quarter performance in Japan overshadows unexpected strength in the US. GDP growth in the advanced economies is now forecast to average 1.4 per cent in 2014, down from the 1.5 per cent forecast in the Update, before picking up to 2.1 per cent in 2015.
Growth in several large Southeast Asian economies was softer than anticipated in the first nine months of 2014, with slight reductions to the projections for Indonesia, the Philippines, Singapore and Thailand. GDP in the sub-region is expected to expand by 4.4 per cent in 2014, down from 4.6 per cent forecast in the Update, and 5.1 per cent in 2015, down from 5.3 per cent.
The growth moderation in China is seen extending into the fourth quarter because of a continued real-estate market correction and its spillover to the related sectors like construction. The China growth forecast is revised downwards to 7.4 per cent in 2014 from 7.5 per cent in the Update, and to 7.2 per cent from 7.4 per cent for 2015.
India is on track to reach the Update growth forecast of 5.5 per cent in fiscal year 2014 (ending March 31, 2015) after expanding by 5.7 per cent in the first quarter and 5.3 per cent in the second.
