ADB lowers its economic growth forecast for developing Asia

  • September 22, 2022
ADB lowers its economic growth forecast for developing Asia

The Asian Development Bank (ADB) lowered its economic growth forecast for developing Asia, citing challenges including China's zero COVID policy, the war in Ukraine, and rising interest rates.

ADB lowered its growth forecast for 2022 to 4.3 percent. The rest of developing Asia, excluding China, is expected to grow 5.3 percent in 2022 and 2023, the bank said.

The bank said that while the lifting of pandemic restrictions has boosted consumer spending and investment in the region, the war in Ukraine has increased global uncertainty, exacerbated supply disruptions, supply disruptions and caused instability in energy and food markets.

The bank said interest rate hikes by the U.S. Federal Reserve and the European Central Bank are also weighing on global demand, while new blockages in China are hampering growth in the world's second-largest economy.

The bank also raised its inflation forecast to 4.5 percent in 2022 and 4 percent in 2023, respectively, due to soaring food and energy prices.

ADB Chief Economist Albert Park said the risks are great for the region's emerging economies, despite the ongoing recovery. A significant downturn in the global economy would seriously undermine demand for exports from the region, Park said.

Stronger-than-expected monetary tightening in advanced economies could lead to financial instability. And growth in the People's Republic of China faces challenges because of repeated lock-ups and a weak real estate sector. Governments in developing Asia should remain vigilant of these risks and take the necessary steps to contain inflation without hampering growth.

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