ADB Slashes 2023 Growth Forecast For Developing Asia

Developing Asia's economic expansion next year is expected to be slower than previously projected as a global slowdown and the prolonged war in Ukraine weigh on the region, the Asian Development Bank (ADB) said in a new report, Cliff Venzon wrote for Nikkei Asia.

Photo Insert: The ADB upped Southeast Asia's growth forecast for this year to 5.5% from 5.1% on stronger-than-expected domestic consumption.

The ADB trimmed its 2023 growth outlook for developing Asia -- which covers 46 regional members of the bank -- to 4.6% from 4.9%. The region will likely end the current year with a 4.2% expansion, slightly lower than the 4.3% forecast in September.

"Three main headwinds continue to hamper recovery in developing Asia: recurrent lockdowns in the People's Republic of China, the Russian invasion of Ukraine, and slowing global growth," the bank said in an update to its Asian Development Outlook publication.

The latest downgrades mark the third time this year the ADB has cut its growth estimates for the region, which is also under pressure from elevated inflation partly due to the war and rising interest rates.

The ADB marginally reduced its regional inflation forecast for this year to 4.4% from 4.5%, but raised its projection for price increases next year to 4.2% from 4.0%.

The ADB said the forecasts were based on information available as of Nov. 30, a week before China began easing its zero-COVID restrictions, which had sparked protests. China's growth forecast for next year has been trimmed to 4.3% from 4.5% amid a slowdown in the US and Europe, the ADB said.

The outlook for India, the region's second-largest economy, after China, is unchanged at 7.2%.

The ADB upped Southeast Asia's growth forecast for this year to 5.5% from 5.1% on stronger-than-expected domestic consumption. But the region is headed for a slowdown next year with 4.7% growth, from 5.0% in the previous forecast.

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