MANILA, Philippines – Surging global demand for Asian exports and low oil prices will help China and the region's developing economies grow faster than expected this year and next, the Asian Development Bank said Thursday, July 20.
The region should now grow by 5.9% this year and 5.8% in 2018, the Manila-based lender said in a report.
The bank updated its earlier forecasts, released in April, that predicted 5.7% growth for the region this year and next.
"Unanticipated external demand has improved growth prospects for developing Asia," ADB said.
"The resulting boost to net exports all but suspends growth moderation" in China, the region's largest economy, it added.
Developing Asia grew by 5.8% last year.
China's economy grew by stronger than expected 6.9% in the first half this year, which should help it expand by 6.7% for 2017 and 6.4% in 2018, it added.
The growth outlook for the manufacturing dynamos of East Asia is brighter, with South Korea energized by receding political uncertainty with the election of a new president, it said.
The bank maintained its 7.4% growth forecast for India this year and 7.6% for 2018, primarily from strong consumption, and the rest of South Asia's prospects also remained robust.
Southeast Asia is also on track to meet forecasts of 4.8% growth this year and 5.0% next year, helped by high first quarter growth in Malaysia, the Philippines and Singapore, the ADB said.
ADB upgraded its forecast growth for the former Soviet republics of Central Asia, with Armenia, Kazakhstan and Tajikistan uplifted by manufacturing and mining.
The bank maintained its earlier projections for Pacific island economies.
It revised its inflation outlook for developing Asia by 0.4 percentage points this year to 2.6%, and by 0.2 percentage points next year to 3.0%.
"Ample supply has held world oil prices low despite rising demand, while favorable weather has kept food prices stable." – Rappler.com