Developing Asia to end 2023 on brighter note as China’s economy recovers: ADB

MANILA: Developing Asia will likely end the year on a brighter note, the Asian Development Bank said on Wednesday, with growth in the region expected to be stronger than previously thought due mainly to a recovery in China’s economy.

The ADB raised its 2023 growth forecast for developing Asia to 4.9% from 4.7% projected in September, but kept its growth outlook for the region at 4.8% next year.

The ADB also revised upwards its growth projection for China to 5.2% from 4.9% previously, but maintained its growth forecast for the world’s second-largest economy at 4.5% next year.

China’s economy grew at a faster-than-expected clip of 4.9% in the third quarter, while consumption and industrial activity in September also surprised on the upside, supported by a flurry of policy measures that bolstered a tentative recovery.

The ADB said robust domestic demand, stronger remittances, recovering tourism were underpinning economic activity in the region, which consists of 46 economies in the Asia-Pacific and excludes Japan, Australia and New Zealand.

Outlook for the sub-regions was mixed, with East Asia seen growing faster at 4.7% this year versus the ADB’s 4.4% forecast in September, while Southeast Asia was projected to grow at 4.3%, slower than the previous forecast of 4.6%.

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South Asia was likewise expected to post stronger growth of 5.7% this year from 5.4% previously, with India’s economy seen expanding at a faster clip of 6.7% this year.

Inflation in developing Asia was forecast to ease to 3.5% this year, down slightly from ADB’s earlier expectation, before rising slightly to 3.6% in 2024.