The Asian Development Bank (ADB) has raised its economic growth forecast for developing Asia and the Pacific in 2024, citing strong domestic demand and robust export performance. The region is now expected to grow by 5.0% this year, up from the previous forecast of 4.9% made in April. This upward revision was announced in ADB's latest Asian Development Outlook (ADO) report, released in September 2024.
For 2025, the growth outlook remains unchanged at 4.9%. Additionally, ADB has lowered its inflation forecast for the region to 2.8%, down from the earlier projection of 3.2%, reflecting easing food prices and the effects of tighter monetary policies.
The improved growth forecast is primarily driven by stronger-than-anticipated expansions in East Asia, the Caucasus, Central Asia, and the Pacific. Rising global demand for semiconductors, spurred by the artificial intelligence boom, is boosting exports, while inflation has moderated, nearing pre-pandemic levels.
"Strong economic fundamentals will continue to support growth this year and next," said ADB Chief Economist Albert Park. "As inflation eases and the US adjusts its monetary policies, financial conditions in the region are expected to improve, reinforcing the positive outlook."
Regional Breakdown
- People’s Republic of China (PRC): The region’s largest economy is projected to grow 4.8% in 2024, with a slight decrease to 4.5% in 2025. Lingering challenges in the property sector have dampened household spending, although this is offset by increased investments supported by fiscal and monetary stimulus.
- India: The second-largest economy in the region is forecast to grow 7.0% in 2024, driven by strong domestic demand and increased government spending. This outlook remains unchanged from April.
- Caucasus and Central Asia: The growth forecast for this subregion has been revised upwards to 4.7%, thanks to improved domestic demand and remittance flows.
- Pacific: Growth for the Pacific region has been adjusted slightly upward to 3.4%, driven by a rise in tourist arrivals.
- Southeast Asia: ADB revised the growth forecast for Southeast Asia downward to 4.5%, reflecting weaker public investment and a slower-than-expected export recovery.
ADB warned that several risks could undermine the growth outlook. These include escalating trade tensions between the US and the PRC, further instability in China’s property market, worsening geopolitical tensions, and the impacts of climate change on food and energy security.
ADB, founded in 1966 and owned by 68 members (49 from the Asia-Pacific region), continues to focus on achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while working towards the eradication of extreme poverty.
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