ADB cuts growth outlook for developing Asia on renewed Covid-19 outbreaks

THE Asian Development Bank (ADB) has cut its economic growth outlook for developing Asia, after renewed Covid-19 outbreaks resulted in slower growth in the third quarter.

With the exception of Central Asia, all subregions' prospects have been revised slightly downwards this year, ADB said in a press statement on Tuesday (Dec 14) .

ADB revised its 2021 outlook for developing Asia slightly downwards to 7 per cent from 7.1 per cent in its September forecast. For 2022, the bank cut its outlook to 5.3 per cent, from 5.4 per cent previously.

South-east Asia's 2021 outlook has also been revised 0.1 percentage point lower to 3 per cent as economies in the subregion imposed targeted restrictions to curtail the Delta variant.

ADB expects Central Asia's economy to grow 4.7 per cent this year, on the back of higher commodity prices and increased public spending. Next year, the region's growth is forecast to rise to 4.4 per cent, from 4.2 per cent in September's estimates.

Meanwhile, the bank trimmed East Asia's growth outlook to 7.5 per cent and 5 per cent for 2021 and 2022, respectively, amid slight downward adjustments in the forecasts for China, the region's largest economy. It expects the Chinese economy to grow 8 per cent this year and 5.3 per cent next year.

As for South Asia, the ADB says it is on track to record the fastest economic recovery, growing 8.6 per cent in 2021, buoyed by India. India is expected to grow 9.7 per cent in FY2021; its outlook has been maintained at 7.5 per cent, as domestic demand is expected to normalise.

ADB expects regional inflation to remain manageable at 2.1 per cent in 2021 and 2.7 per cent in 2022. This will allow for a more accommodative monetary policy, as well as support pandemic recovery efforts, it said.