The Asian Development Bank (ADB) has revised its economic growth forecast for developing Asia and the Pacific upward, citing robust domestic demand and a solid export performance. According to the Asian Development Outlook (ADO) September 2024 report, the region’s economy is now expected to grow by 5.0 per cent this year, up from an earlier projection of 4.9 per cent in April. The 2025 forecast remains steady at 4.9 per cent.

Inflation in the region is anticipated to decline to 2.8 per cent in 2024, down from a previous estimate of 3.2 per cent, due to easing food prices and the delayed effects of monetary policy tightening. These developments bring inflation close to pre-pandemic levels.

The upward revision is driven by stronger-than-expected growth in East Asia, the Caucasus and Central Asia, and the Pacific. Increased global demand for semiconductors, particularly fuelled by advancements in artificial intelligence, has been a key factor boosting exports from the region.

ADB has raised 2024 growth forecast for developing Asia and the Pacific to 5.0 per cent, citing strong domestic demand and robust exports.
Inflation is expected to ease to 2.8 per cent.
Growth is driven by stronger performance in East Asia, Central Asia and the Pacific, though risks remain from US-China tensions, China’s property market and climate impacts.
India’s growth steady at 7.0 per cent.

ADB chief economist Albert Park commented, “Strong economic fundamentals will continue to underpin expansion this year and next. Financial conditions are expected to improve as inflation moderates further and the US eases its monetary policy, supporting the region’s positive outlook.”

Despite the optimistic outlook, the ADB warns of risks including escalating US-China trade tensions, a potential deterioration in China’s property market, geopolitical tensions, and the impacts of climate change on commodity prices and food and energy security.

The ADB’s growth forecast for China, the region’s largest economy, remains at 4.8 per cent for this year and 4.5 per cent in 2025. China’s economic expansion has been hindered by ongoing challenges in its property sector, affecting household spending. However, higher investment and strong export performance, driven by fiscal and monetary stimulus, have partly offset these issues.

India, the second-largest economy in the region, is expected to maintain its 7.0 per cent growth rate in 2024, supported by strong domestic demand and increased government expenditure.

Elsewhere, growth in the Caucasus and Central Asia has been revised upwards to 4.7 per cent, spurred by rising remittances and domestic demand. The Pacific region is now forecast to grow by 3.4 per cent, with a boost from tourism, while Southeast Asia’s growth forecast has been lowered to 4.5 per cent due to declining public investment and a slower recovery in exports.

Fibre2Fashion News Desk (KD)