ADB now forecasts 2016 growth for the developing economies at 5.6 percent, below its previous projection of 5.7 percent. For 2017, growth is seen unchanged at 5.7 percent.
“Although the Brexit vote has affected developing Asia’s currency and stock markets, its impact on the real economy in the short term is expected to be small,” said Shang- Jin Wei, ADB’s chief economist. “However, in light of the tepid growth prospects in the major industrial economies, policymakers should remain vigilant and be prepared to respond to external shocks to ensure growth in the region remains robust.”
Growth in 2016 and 2017 is led by South Asia, and India in particular, which continues to expand strongly, while the People’s Republic of China (PRC) is on track to meet earlier growth projections.
In East Asia, despite muted activity in Hong Kong, China and the Republic of Korea, growth forecasts are unchanged at 5.7 percent in 2016 and 5.6 percent in 2017, with the world’s second largest economy, the PRC, on track to meet projected growth of 6.5 percent in 2016 and 6.3 percent in 2017. To support its target s, the PRC government is expected to continue using fiscal and monetary stimulus measures.
South Asia , meanwhile is expected to be the fastest growing sub-region, led by India, whose economy has shrugged off global headwinds and is on track to meet ADB’s March fiscal year 2016 (year to March 2017) projected growth target of 7.4 percent.
Pakistan, further improvements in energy supply, higher infrastructure investments, and an improved security environment will help push up growth in 2016 and 2017, the report said, while the Bangladesh economy will remain robust on the strength of its garments sector.
In Southeast Asia, growth projections for the sub-region in 2016 and 2017 remain unchanged at 4.5 percent and 4.8 percent, with solid per formances by most economies in the first half of 2016 driven by private consumption. The exception was Vietnam where the economy came under pressure from a worsening drought that caused a contraction in the agriculture sector.
APMEN Sept 2016, News
