Growth in developing Asia will be weaker than initially estimated this year and next amid a slower expansion in China and lackluster export demand from advanced nations, the Asian Development Bank said.
The region’s gross domestic product will probably increase 6.3 percent in 2013 and 6.4 percent next year, the Manila-based lender said in a report today. In April, it forecast expansion of 6.6 percent this year and 6.7 percent in 2014.
The International Monetary Fund reduced its global growth forecast earlier this month as the U.S. recovery weakens, China’s economy levels off and Europe’s recession deepens. China’s expansion slowed for a second quarter in the three months through June as growth in factory output and fixed-asset investment eased and Premier Li Keqiang reined in a credit boom.
“The drop in trade and scaling back of investment are part of a more balanced growth path for China, and the knock-on effect of its slower pace is definitely a concern for the region,” ADB chief economist Changyong Rhee said in a statement. “We are also seeing more subdued activity across much of developing Asia.”
The world’s second-largest economy may grow 7.7 percent this year and 7.5 percent in 2014, in part as a strengthening yuan weighs on external demand and weaker domestic consumption curbs imports, the ADB said. India may grow 5.8 percent this year as “slow progress” in pushing through reforms constrains growth, the report said.
Southeast Asia will probably grow 5.2 percent this year from an earlier prediction of 5.4 percent, the ADB said today. Consumer prices in developing Asia are forecast to rise 3.5 percent in 2013 and 3.7 percent in 2014 as slow growth helps to contain inflationary pressures, the ADB said.
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