ADB maintains growth forecast for developing Asia, says more stimulus expected in China, by Reuters

MANILA (Reuters) – Developing Asia is on track to grow 5 percent this year, supported by strong consumption and high demand for technology exports, the Asian Development Bank (ADB) estimated on Wednesday and said it was expected China to provide more economic support measures.

In an update to the Asian Development Outlook report, the AfDB left most growth forecasts for the region’s economies unchanged from the July report, maintaining its growth outlook for developing Asia at 5.0 percent this year and 4.9% next year.

It revised down its inflation forecast for developing Asia, which groups 46 Asia-Pacific countries, to 2.8 percent this year and 2.9 percent next year, from 2 previous forecasts .9% and 3.0% respectively.

The Manila-based lender highlighted some downside risks to its outlook, including rising protectionism, escalating geopolitical tensions, adverse weather conditions and a deterioration in China’s housing market.

China, the world’s second-largest economy, is grappling with deflationary pressures and struggling to boost growth despite a raft of policy measures aimed at boosting domestic spending.

On Tuesday, China’s central bank announced broad monetary stimulus and measures to support the housing market as authorities try to restore confidence in the economy.

“Whether this will work remains to be seen, as many of the structural problems in the real estate sector remain persistent,” ADB chief economist Albert Park told a briefing.

“It may take more effort and work from their government” to ease consumer and investor concerns, Park said, adding that “a more proactive government policy would be helpful.”

Park also said the ADB was not so worried about China’s deflation because it sees prices recovering.

Last week, the US Federal Reserve kicked off its own easing cycle with a sharp half-percentage point interest rate cut.

“With the Fed’s 50 basis point rate cut, central banks have more room to relax, and we expect more of them to do so,” Park said.

ADB kept its 2024 growth forecast for China at 4.8 percent, below the government’s official target of about 5 percent. Growth for 2025 is still forecast at 4.5%.

“The PRC (People’s Republic of China) growth forecast is maintained despite the prolonged downturn in the real estate sector, assuming that fiscal and monetary easing will help support the economy,” Park said.

GDP GROWTH 2023 2024 2024 2024 2025 2025 2025

APR JULY SEP APR JULY SEP

Caucasus and 5.3 4.3 4.5 4.7 5.0 5.1 5.2

Central Asia

East Asia 4.7 4.5 4.6 4.6 4.2 4.2 4.2

China 5.2 4.8 4.8 4.8 4.5 4.5 4.5

South Asia 6.3 6.3 6.3 6.6 6.5 6.5

6.9

India 8.2 7.0 7.0 7.0 7.2 7.2 7.2

Southeast 4.1 4.6 4.6 4.5 4.7 4.7 4.7

Asia

Indonesia 5.0 5.0 5.0 5.0 5.0 5.0 5.0

Malaysia 3.7 4.5 4.5 4.5 4.6 4.6 4.6

Myanmar 0.8 1.2 n/a 0.8 2.2 n/a 1.7

Philippines 6.0 6.0 6.0 6.2 6.2 6.2

5.5

Singapore 1.1 2.4 2.4 2.6 2.6 2.6 2.6

Thailand 1.9 2.6 2.6 2.3 3.0 3.0 2.7

Vietnam 6.0 6.0 6.0 6.2 6.2 6.2

5.1

Pacific 3.5 3.3 3.3 3.4 4.0 4.0 4.1

Developing 4.9 5.0 5.0 4.9 4.9 4.9

Asia

5.1

INFLATION

Caucasus and 7.9 7.6 6.9 7.0 6.8 6.2

Central Asia

10.2

East Asia 0.6 1.3 0.8 0.8 1.6 1.6 1.3

China 0.2 1.1 0.5 0.5 1.5 1.5 1.2

South Asia 8.4 7.0 7.1 7.0 5.8 5.8 6.1

India 4.6 4.6 4.7 4.5 4.5 4.5

5.4

Southeast 4.1 3.2 3.2 3.3 3.0 3.0 3.2

Asia

Indonesia 3.7 2.8 2.8 2.8 2.8 2.8 2.8

Malaysia 2.5 2.6 2.6 2.4 2.6 2.6 2.7

Myanmar 22.0 15.5 n/a 20.7 10.2 n/a 15.0

Philippines 6.0 3.8 3.8 3.6 3.4 3.4 3.2

Singapore 4.8 3.0 3.0 2.6 2.2 2.2 2.2

Thailand 1.2 1.0 0.7 0.7 1.5 1.3 1.3

Vietnam 3.3 4.0 4.0 4.0 4.0 4.0 4.0

Pacific 3.0 4.3 4.3 3.6 4.1 4.1 4.1

Developing 3.3 3.2 2.9 2.8 3.0 3.0 2.9

Asia