(RTTNews) - The Asian Development Bank upgraded the developing Asia growth outlook despite the slowdown in China as strong domestic demand and improvement in semiconductors and services exports in the remaining region boost expansion.
The Manila-based lender raised its developing Asia growth outlook for this year to 4.9 percent from 4.8 percent projected in December. Growth is forecast to remain steady at 4.9 percent in 2025.
The ADB forecast the second largest economy to log weaker growth this year due to the property market downturn, amplified by fading domestic consumption growth following the last year's reopening.
China's economy is expected to grow 4.8 percent in 2024, which is below the government's full year target of about 5 percent.
This was better than the previous outlook of 4.5 percent but weaker than the 5.2 percent expansion posted in 2023. The growth is seen easing further to 4.5 percent next year.
The lender observed that stronger growth in South Asia and Southeast Asia will offset lower growth in other sub regions.
Driven by investment, recovering consumption and gains in electronics and services exports, India is set to affirm its position as a major growth engine within Asia, the ADB said.
India's GDP growth is projected at 7.0 percent in 2024 and 7.2 percent in 2025.
Regarding public debt, the lender said improved growth helped to lower debt ratios.
However, public debt relative to GDP stabilized across much of developing Asia, but it remained high compared to pre-pandemic levels and vulnerable to higher-for-longer interest rates.
Further, the ADB cautioned that an escalation in conflict and geopolitical tensions would worsen regional prospects.
The lender also warned that the path of the US monetary policy and further intensification of property market stress in China could impact the region's outlook.
On the price front, the ADB forecast inflation to soften further as monetary policies remain relatively tight despite some easing. Inflation in developing Asia is forecast to ease to 3.2 percent next year and 3.0 percent in 2025.
