In China, the economy is projected to expand by 5.2 per cent this year, an upward adjustment from the initial estimate of 4.9 per cent. This increase is attributed to heightened household consumption and public investment, particularly noted in the third quarter. Meanwhile, India’s growth outlook has been revised to 6.7 per cent from 6.3 per cent, following a faster-than-expected expansion in the July-September period, driven by a significant increase in industrial output, as per the report.
These positive adjustments for China and India have more than compensated for the reduced growth forecast in Southeast Asia. The lowered projection for this region, now at 4.3 per cent compared to the previous 4.6 per cent, is due to a downturn in manufacturing export demand.
ADB’s December 2023 report forecasts a 4.9 per cent growth for Asia-Pacific economies in 2023, up from 4.7 per cent, driven by strong demand in China and India.
China’s growth is projected at 5.2 per cent, India at 6.7 per cent.
Southeast Asia’s forecast is lowered to 4.3 per cent.
Inflation is expected at 3.5 per cent this year and 3.6 per cent next year.
Regarding inflation, the region’s outlook for the current year has been slightly reduced to 3.5 per cent, down from an earlier projection of 3.6 per cent. However, for the next year, inflation is anticipated to marginally increase to 3.6 per cent, compared to the previously forecasted 3.5 per cent.
In terms of regional subgroups, the outlook for economies in the Caucasus and Central Asia has been raised marginally. In contrast, projections for the Pacific economies remain unchanged.
The ADB’s report also highlights potential risks to this economic outlook. These include the possibility of persistent high-interest rates in the US and other advanced economies, potentially leading to financial instability in more vulnerable economies in the region, especially those with high debt levels. Additionally, potential supply disruptions due to factors like the El Nino weather pattern or the ongoing conflict in Ukraine could trigger a resurgence in inflation, especially in the food and energy sectors.
Fibre2Fashion News Desk (DP)
