ADB sees developing Asia on track

Developing Asia remains on track toward for +6.2% GDP growth this year according to the Asian Development Bank’s latest economic report. The forecast is in line with the Bank’s previous estimates for the region’s 45 countries, which were released in April.

“Developing Asia as a region continues to perform well,” said ADB deputy chief economist Juzhong Zhuang. “The pace of the growth moderation in the People’s Republic of China (PRC) is in line with our expectations while the stage is set for India to pursue reform that could unlock its growth potential.”

The major industrial economies are anticipated to expand by +1.5% this year, a downward revision from the +1.9% forecast in April. The ADB said softer than expected US growth has been somewhat offset by a strong first quarter in Japan.

It said that in East Asia, quarterly growth in China met expectations with the country on track to meet forecasts of +7.5% growth in 2014 and +7.4% in 2015. Meanwhile improving prospects in India have buoyed South Asia’s growth thanks to the new government’s ten-point plan to revive the economy with a focus on infrastructure and investment reforms.

The ADB’s outlook for Southeast Asia has softened with weaker growth prospects in Indonesia, Thailand, and Vietnam. Commodity prices have been a key factor for Indonesia, while the problem in Thailand is political unrest and Vietnam is feeling the impact of tensions with China.

Growth in Central Asia is said to be moderating, with many economies affected by the deteriorating outlook for Russia. The ADB’s revised projections reflect weaker-than-expected performances in Kazakhstan, Kyrgyz Republic and Uzbekistan so far in 2014.