Asian Development Bank (ADB) has lowered its 2012 economic growth forecast for developing Asia to 6 per cent from 6.1 per cent estimated in October.
One of the factors that led to the cut in growth forecast for developing Asia is the continued sluggishness in Indian economy, with sliding industrial production and declining exports.
While China’s growth forecast remained at 7.7 per cent, India’s growth estimate for 2012-13 has been lowered to 5.4 per cent from 5.6 per cent projected in October.
ADB also revised downwards its growth forecast for developing Asia (Asian economies excluding Japan) to 6.6 per cent in 2013 from 6.7 per cent in October.
Slower-than-expected growth in India, Hong Kong, South Korea and Taiwan and the two largest central Asian economies Azerbaijan and Kazakhstan slightly outweigh the more rapid expansions in some other economies in the region such as the Philippines and Malaysia.
South-East Asia robust
The robust private consumption in South-East Asia and a mild economic recovery in China nearly balance out the weaknesses in India’s economy, ADB said in a new report — Asian Development Outlook supplement — released on Friday.
This is the second time the Manila-headquartered bank has slashed growth estimates for the Asian region.
ADB had in October cut its April’s forecast of 6.9 per cent growth in 2012 to 6.1 per cent — the lowest rate since 2009 when economy expanded by six per cent.
The surging economies of South-East Asia have been a bright spot in developing Asia’s otherwise subdued 2012 growth performance.
But the broader region should still pick up steam in 2013, said the ADB report.
Sluggish Europe, US
The report warns that ongoing sluggishness and uncertainty in Europe and the US mean that risks to the forecasts remain firmly on the downside.
“Enduring debt problems and economic weakness in Europe and the looming fiscal cliff in the US remain very real threats to developing Asia next year,” said ADB Chief Economist Changyong Rhee.
“At the same time there are highly encouraging signs from South-East Asia and recent data from China confirms a bottoming out of the economy, with industrial output rebounding to a five-month high in October”.