ADB slashes down the Asia growth forecast citing global pull
Citing the global headwinds and a weaker outlook for China, the Asian Development bank has cut down its growth forecast for the Asian economy this year. Asian Development Bank, a Manilla based lender on its Asian Development outlook on Wednesday said that the fast developing Asia is likely to expand only 5.7% this year as well as in 2017. However, there was a forecast in December, where the Asian Development Bank had predicted a growth of 6%. ADB Chief Economist Shang-Jin Wei said, "Risks are tilted to the downside as tightening U.S. monetary policy may heighten financial volatility, further moderation in China could spill over into its neighbors, and producer price deflation may undermine growth in some economies.” China, the world’s second largest economy’s growth is expected to fall to 6.5% this year from 6.9% in 2015. It’s the weakest expansion seen in this quarter in this century and what is worse the growth is expected to further slowdown to 6.3% in 2017. The 2016 forecast of the bank for China has seen a fall from 6.7%, the December estimate and it is also at a lower end of Beijing’s target of 6.5 to 7%. The key reason for this is the government’s painful reforms. However, Premier Li Keqiang has promised that these painful reforms would not lead to hard landings. ADB also pointed out that the poor prices for oil and commodities also mark a question over Asia’s commodity- dependent economy. However, the growth in India is expected to recover to 7.8 %, though it slipped down to 7.4% from 7.6 in 2015. ADB forecast growth for South Asia is at 7.3 percent in 2017 and 6.9 percent in 2016, compared to the growth of 7% last year. Southeast Asian countries are expected to expand from 4.4% in 2015 to 4.5% this year, and by 4.8% in 2017. The bank also sees a growth of East Asia by 5.6% in 2017 and 5.7% in 2016. There was 6.0% growth last year. ADB also predicted that Central Asia is estimated to expand by 2.1% this year following a 2.9 % growth in 2015, and 2.8% in 2017.
March 30, 2016 | 04:40pm IST
to success.