The Asian Development Bank today lowered the growth forecast for developing Asia to 5.7 per cent in 2016 and 2017, weighed down by subdued global demand and a slowing Chinese economy.
In the new Asian Development Outlook (ADO) 2016, ADB forecasts gross domestic product (GDP) growth at 5.7 per cent in 2016 and 2017 for the region. In 2015, GDP growth was 5.9 per cent.
The ADO Supplement released in December had projected developing Asia to grow at 6 per cent in 2016.
“Growth is slowing across much of developing Asia as a result of the continued weak recovery in major industrial economies and softer growth prospects for the People’s Republic of China (PRC). This will combine to push growth in developing Asia for 2016 below previous projections,” ADB said.
For China, ADB has projected growth to decline from 6.9 per cent in 2015 to 6.5 per cent in 2016. In 2017, growth will slow down to 6.3 per cent. India, ADB said, will remain one of the fastest growing major economies in the period ahead.
Growth will dip to 7.4 per cent in 2016-17 and with measures to fund stalled projects and an uptick in bank credit, it will pick up to 7.8 per cent in 2017-18. India’s economy expanded by 7.6 per cent in 2015-16.
“Reforms geared to attract more foreign direct investment and stronger corporate and bank balance sheets will help maintain growth momentum,” it said, adding that while macroeconomic fundamentals are strong, progress on major structural reform is expected to be gradual.
