The region’s economy is projected to grow 4.2% in 2022 and 4.6% in 2023. Photo credit: ADB.
Global headwinds slowing down developing Asia’s recovery from the COVID-19 pandemic.
The Asian Development Bank (ADB) has lowered its economic growth forecasts for developing Asia and the Pacific amid a worsened global outlook.
The region’s economy will grow 4.2% in 2022 and 4.6% in 2023, ADB said in a regular supplement to the Asian Development Outlook (ADO) 2022, released recently. ADB estimated in September that the economy would grow 4.3% in 2022 and 4.9% in 2023.
Monetary policy tightening by central banks globally and in the region, the protracted Russian invasion of Ukraine, and recurring lockdowns in the People’s Republic of China (PRC) are slowing down developing Asia’s recovery from the COVID-19 pandemic. Restrictions under the “zero-COVID” approach, along with a struggling property market, have led to another downgrade of the PRC’s growth outlook.
“Asia and the Pacific will continue to recover, but worsening global conditions mean that the region’s momentum is losing some steam as we head into the new year,” said ADB Chief Economist Albert Park. “Governments will need to work together more closely to overcome the lingering challenges of COVID-19, combat the effects of high food and energy prices—especially on the poor and vulnerable—and ensure a sustainable, inclusive economic recovery.”
ADB lowered its forecast for inflation in developing Asia and the Pacific in 2022 to 4.4% from 4.5%. However, the bank raised its projection for 2023 to 4.2% from 4.0%, due to lingering inflationary pressures from energy and food.
The PRC’s economy is forecast to expand by 3.0% in 2022, compared with a previous projection of 3.3%. The forecast for 2023 was cut to 4.3% from 4.5%, due to the global slowdown. Gross domestic product growth projections for India were maintained at 7.0% in the 2022 fiscal year and 7.2% next fiscal year.
Even with the downgraded forecasts, developing Asia will still do better than other regions globally, both in terms of growth and inflation. ADB’s 2022 growth forecast for Southeast Asia was raised to 5.5% from 5.1%, amid robust consumption and tourism recovery in Malaysia, the Philippines, Thailand, and Viet Nam. Projections for 2023, however, were lowered to 4.7% from 5.0% due to weakening global demand. The growth forecast for the Caucasus and Central Asia in 2022 was upgraded to 4.8% from 3.9%, while the projection for the Pacific was raised to 5.3% from 4.7%, due to a strong tourism recovery in Fiji.
ADO is published every April, with an update in September and brief supplements published normally in July and December. Developing Asia refers to the bank’s 46 developing members.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
This article was first published by ADB on 14 December 2022.
