The Asian Development Bank (ADB) said on Wednesday it has lowered its growth forecasts for developing Asia this year and the next, as a weaker outlook for China and India indicated softer economic activity elsewhere in the region. The Manila-based lender also lowered its forecast for India – South Asia’s largest economy – for fiscal years 2019 and 2020 to 5.1 per cent and 6.5 per cent, from its September estimates of 6.5 per cent and 7.2 per cent, due to liquidity strains on its non-banking finance companies and slow job growth.
The bank trimmed its growth forecast for developing Asia to 5.2 per cent in 2019 and 2020, the ADB said in an updated annual outlook report, from 5.4 per cent and 5.5 per cent previously.
It cut its growth estimates for China for this year and the next to 6.1 per cent and 5.8 per cent, respectively, from the 6.2 per cent and 6.0 per cent forecasts announced in September, on the US-China trade tensions and as higher prices of pork cut into consumer spending.
“While growth rates are still solid in developing Asia, persistent trade tensions have taken a toll on the region and are still the biggest risk to the longer-term economic outlook”, ADB Chief Economist Yasuyuki Sawada said.