ADB Raises 2023 Growth Forecast for Developing Asia and China

Summary

The ADB has revised its 2023 growth outlook for the developing Asia region, raising it from 4.7% to 4.9%. China’s growth forecast has also been increased to 5.2% from prior projections of 4.9%, however the growth forecast for the next year remains unchanged at 4.5%. Industrial activity and consumption in China surpassed expectations in Q3, attributing to support from a range of policy measures. The ADB cites firm domestic demand, recovering tourism and robust remittances as key factors bolstering economic activity across the 46 economies in the Asia-Pacific region. The growth outcomes for specific sub-regions vary, with East Asia expected to see accelerated growth and Southeast Asia’s growth predicted to be slower than anticipated.

South Asia’s economy is projected to expand, with India’s economic growth set to speed up. Meanwhile, inflation in developing Asia will likely subdue to 3.5% this year, falling slightly from the ADB’s prior prediction, before rising marginally to 3.6% in 2024.

ADB’s Revised Growth Forecast

The Asian Development Bank (ADB) has updated its 2023 growth forecast for developing Asia, increasing it to 4.9% from 4.7% as projected in September, whilst the growth prediction for the region for next year remains steady at 4.8%.

China’s Economic Prospects

The ADB has also upwardly revised its growth projection for China, the world’s second largest economy, to 5.2% from a previous forecast of 4.9%. However, their growth estimate for the next year remains constant at 4.5%. China’s economy exhibited rapid growth in Q3, surpassing expectations by expanding at a rate of 4.9%. Both consumption and industrial activity in September outstripped forecasts, aided by various policy measures which helped facilitate a tentative recovery.

Economic Activity in Asia-Pacific Region

The ADB has expressed that resilient domestic demand, increased remittances, and tourism recovery are vital elements that enhance economic activity in the region, comprising 46 economies in the Asia-Pacific region, excluding Japan, Australia and New Zealand. The growth perspectives for the sub-regions diverge, with East Asia expected to experience accelerated growth at 4.7% this year against the ADB’s 4.4% forecast in September. Conversely, Southeast Asia is estimated to register slower growth at 4.3%, falling short of the previous forecast of 4.6%.

South Asia’s Economic Growth

South Asia is on track to enjoy stronger growth of 5.7% this year, a marked increase from the previous 5.4% prediction. Specifically, India’s economy is set to grow at a faster pace of 6.7% this year.

Inflation Forecast

Inflation in developing Asia is expected to decline to 3.5% this year, a minor reduction from ADB’s initial forecast, prior to a small increase to 3.6% in 2024.

Ultimately, these financial developments and forecasts can greatly influence trading decisions and strategies in relation to Asia’s financial markets. Traders in assets linked to these economies may want to monitor these trends closely.

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