ADB Lowers Developing Asia's 2022 Growth Forecast To 4.3 Pct

KUALA LUMPUR, Sept 21 (Bernama) -- The Asian Development Bank (ADB) has lowered its economic growth forecast for Developing Asia to 4.3 per cent this year from its April projection of 5.2 per cent. The region’s economic growth forecast for 2023 was also trimmed to 4.9 per cent from a previous estimate of a 5.3 per cent increase, the bank said in its Asian Development Outlook 2022 Update report released today. ADB Macroeconomic Research Division director Abdul Abiad said several downside risks loom large, including a sharp deceleration in global growth, stronger-than-expected monetary policy tightening in advanced economies, the Russian invasion of Ukraine escalating, a deeper-than-expected deceleration in China, and negative pandemic developments. “All these factors could all dent Developing Asia’s growth,” he said during the Asian Impact Webinar: Asian Development Outlook 2022 Update today. He said domestic consumer spending and investment are driving growth as economies in the region continue to relax pandemic restrictions, thanks in part to vaccination drives and declining COVID-19 mortality. “However, the continuing invasion of Ukraine has heightened global uncertainty, worsened supply disruptions, and unsettled energy and food markets​. “More aggressive monetary tightening by the US Federal Reserve and the European Central Bank is denting global demand and rattling financial markets,” he added. Abdul said governments in developing Asia need to remain vigilant against these risks and take the necessary steps to contain inflation without derailing growth. ADB raised its regional inflation forecast to 4.5 per cent from 3.7 per cent for 2022, and to 4.0 per cent from 3.1 per cent for 2023. He said the price pressures in Developing Asia, while remaining lower than elsewhere in the world, are increasing amid higher energy and food prices. “Although global food prices have abated recently, the continuing war in Ukraine is keeping the costs of imported energy elevated in the region. “While Developing Asia’s exports remained strong in the first half of the year, they are slowing rapidly and a sharp deceleration in global growth would severely undermine demand,” he said. -- BERNAMA