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The Asian Development Bank (ADB) has raised its growth forecast for developing countries in the Asia-Pacific region to 5.0% this year, according to a report released on July 17, 2024. Previously, economic growth was expected to be 4.9% due to strong growth in regional exports and domestic demand. The growth forecast for next year remains at 4.9%.
Inflation is expected to slow to 2.9 percent this year as the impact of rising global food prices and interest rates fades, according to the latest Asian Development Outlook released today.
The post-pandemic recovery has seen exports pick up, driven by domestic demand, boosting regional economic growth. Strong global demand for electronic products, especially semiconductors used in high-tech applications and artificial intelligence, is boosting exports from some Asian countries.
“The region’s fundamentals remain strong despite higher growth in most countries in Asia and the Pacific in the second half of last year, but policymakers still need to be cautious,” said Albert Parker, ADB’s chief economist. He cited a number of risks that could affect the outlook, including uncertainty over election outcomes, policymaking, interest rates, and geopolitical tensions in major economies.
While inflation across the region is easing toward pre-pandemic levels, price pressures continue to rise in some countries, while food inflation remains high in South Asia, Southeast Asia, and the Pacific, partly due to adverse weather and rising temperatures that have limited food exports in some countries.
Growth forecasts for the region’s largest economy, the People’s Republic of China (PRC), remain at 4.8% this year. Despite the difficulties in China’s real estate sector, a sustained recovery in services consumption and higher-than-expected exports and industrial activity are supporting economic growth. The government introduced additional policy measures in May to support the real estate market.
India is the fastest growing economy in the region, with growth outlook unchanged at 7.0% for FY2024. India’s industrial sector is expected to grow strongly, driven by high demand in manufacturing and construction. Agriculture is expected to recover as above-normal monsoon is forecast and investment demand remains strong, led by public investment.
For Southeast Asia, the growth forecast for this year is maintained at 4.6%, as both domestic and external demand improve significantly, and for the Caucasus and Central Asia, the growth forecast for this year is raised to 4.5%, from 4.3%, driven by stronger-than-expected growth in Azerbaijan and the Kyrgyz Republic. In the Pacific, the outlook for 2024 is maintained at 3.3%, driven by tourism and infrastructure spending, as well as restarted mining activities in Papua New Guinea.
The Asian Development Bank (ADB) is committed to achieving environmental prosperity, resilience, and sustainability in Asia and the Pacific while eradicating extreme poverty. Founded in 1966, the Bank is governed by 68 member countries, 49 of which are from the region. Copyright: Soth Ly
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