ADB cuts Asia growth forecasts on India’s slowdown
HONG KONG: The Asian Development Bank on Friday cut its economic growth forecasts for the region, which has been dragged back by a continued slowdown in India despite positive data out of powerhouse China.
The ADB lowered its 2012 growth forecast for developing Asia, which comprises 45 nations, marginally from 6.1 per cent to 6.0 per cent. It also revised downward the 6.7 per cent growth outlook for 2013 to 6.6 per cent.
It is the second time the bank has slashed growth estimates for the region, after cutting April’s forecast of 6.9 per cent growth in 2012 to 6.1 per cent in October – the lowest rate since 2009 when the economy expanded by six percent.
It said the adjustment was made following mixed third quarter data in which “positive events” were slightly outweighed by sluggish figures elsewhere.
“Recent downside developments are expected to pare 0.1 percentage points from developing Asia’s growth both this year and next,” the Manila-based lender said in a statement.
“Slower-than-expected growth for India, the newly-industrialising economies and the two largest Central Asian economies slightly outweighs the more rapid expansion in some major Southeast Asian economies,” the ADB said.
ADB’s growth forecast for China this year remained at 7.7 per cent, while India’s estimated rate fell from 5.6 per cent to 5.4 per cent for the 2012 fiscal year.
Data last week showed India’s economic growth for the July-September quarter eased to 5.3 per cent, extending a slowdown since the start of the year, although analysts said a modest recovery was looming.
The once-booming Indian economy has slowed sharply due to high interest rates, Europe’s debt crisis and sluggish investment caused by domestic and overseas concerns about policy-making and corruption.
A slew of recent Chinese data meanwhile suggests recovery may be around the corner, with official figures released Saturday showing that manufacturing activity in the world’s second-largest economy grew in November for the second consecutive month.
China’s economic growth hit a three-year low of 7.4 per cent in the third quarter from July to September.
ADB warned of the risks caused by uncertainties in the US and European economies, both of which are major export markets.