On Wednesday, the Asian Development Bank (ADB) lowered its growth projections for developing Asia for 2022 and 2023 due to the growing dangers posed by tighter monetary policy from central banks, the effects of the war in Ukraine, and COVID-19 lockdowns in China.
The combined economy of the region, which includes China and India, is now predicted by the ADB to expand by 4.3% this year, up from a previous forecast of 4.6% in July and 5.2% in April.
According to the ADB, its flagship Asian Development Outlook report’s September edition, the region’s economy will grow by 4.9% in 2023, less quickly than it did in April and July, when it was expected to grow by 5.3% and 5.2%, respectively.
“Global demand is being dented and the financial markets are being shaken by more aggressive tightening by the U.S. Federal Reserve and other central banks.”
He cautioned that a significant global economic downturn would seriously impair demand for the region’s exports.
China’s economy will likely grow by 3.3% this year, which is a further decrease from the earlier forecast of 4.0% growth from 5.0% in April. The second-largest economy in the world will expand by 4.5%, less than the ADB’s earlier prediction of 4.8%.
While Southeast Asia and Central Asia are anticipated to grow faster than previously predicted, at 5.1% and 3.9%, respectively, the outlook for the sub-regions this year remains mixed.
Despite a lower growth forecast for India and an economic crisis in Sri Lanka, the ADB maintained its 6.5% growth forecast for South Asia.
The Manila-based lender has also increased its estimates for regional inflation as supply disruptions continue to drive up the cost of food and fuel.
This year, average inflation in developing Asia is predicted to reach 4.5%, up from forecasts in April and July of 3.7% and 4.2%, respectively.
Inflation is predicted to reach 4.0% in 2023, up from projections of 3.1% in April and 3.5% in July.