MANILA, April 11 — Developing Asia's growth this year is expected to be slightly stronger than previously forecast as healthy domestic demand in many economies offsets the property-driven slowdown in China, the Asian Development Bank (ADB) said today.
The ADB nudged up its 2024 growth forecast for Developing Asia to 4.9 per cent from 4.8 per cent projected in December last year, but warned of persistent challenges like rising geopolitical tensions, including in the Middle East, which could disrupt supply chains and reignite inflation.
The Manila-based lender's 2024 growth forecast was slightly weaker than the region's 5.0 per cent growth in 2023. Growth for 2025 was also forecast at 4.9 per cent.
"Growth in developing Asia will remain robust this year, in spite of uncertainty in the external environment.
"The end of interest-rate hiking cycles in most economies as well as continued recovery in goods exports from an upturn in the semiconductor cycle will support growth," said ADB Chief Economist Albert Park in the Asian Development Outlook report.
China remains a weight on the regional growth outlook as a protracted property crisis and other challenges keep the world's second-largest economy from mounting a strong economic revival.
In a briefing ahead of the report's release, ADB Principal Economist John Beirne said yesterday's cut by Fitch of its outlook on China's sovereign credit rating to negative was concerning for investor sentiment.
"It can have additional problems that are already apparent in the property sector, and certainly, it is not helpful when we consider local government debts, the sustainability of debt, and the cost of sovereign borrowing," he said.
The ADB forecast China would grow 4.8 per cent in 2024. That is higher than its 4.5 per cent estimate made in December but slower than growth of 5.2 per cent in 2023.
It expects the Chinese economy to lose more steam next year, with growth seen slowing to 4.5 per cent, "driven by the weak property market and amplified by fading domestic consumption growth after last year's reopening", the ADB said.
The ADB forecast regional inflation would slow to 3.2 per cent in 2024 from 3.3 per cent in 2023, and ease further to 3.0 per cent in 2025.
— Reuters
