The Asian Development Bank (ADB) has marginally increased its economic growth estimate for developing Asia and the Pacific to 5.0% for this year, up from the earlier forecast of 4.9%. This revision is attributed to the rise in regional exports complementing strong domestic demand. The growth forecast for 2025 remains unchanged at 4.9%.
Inflation is anticipated to decrease to 2.9% this year, owing to falling global food prices and the ongoing effects of higher interest rates, as detailed in the latest edition of the Asian Development Outlook (ADO) released today.
After a post-pandemic recovery driven predominantly by domestic demand, a resurgence in exports is now propelling the region’s economic expansion. Increased global demand for electronics, especially semiconductors for advanced technology and artificial intelligence, is enhancing exports from several Asian countries.
“Most of Asia and the Pacific is witnessing faster economic growth compared to the latter half of last year,” said ADB Chief Economist Albert Park. “Although the region’s fundamentals are robust, policymakers need to stay alert to various risks that could impact the outlook, such as uncertainties related to election results in major economies, interest rate decisions, and geopolitical tensions.”
While inflation is gradually returning to pre-pandemic levels across the region, some economies continue to experience high price pressures. Food inflation remains significant in South Asia, Southeast Asia, and the Pacific, partly due to adverse weather and food export restrictions in certain countries.
The growth forecast for the People’s Republic of China (PRC), the largest economy in the region, is sustained at 4.8% for this year. Ongoing recovery in service consumption and stronger-than-anticipated exports and industrial activity are bolstering this growth, despite the PRC’s property sector still facing challenges. The government introduced new policy measures in May to support the real estate market.
India, the fastest-growing economy in the region, retains its growth projection of 7.0% for fiscal year 2024. India’s industrial sector is expected to expand robustly, driven by manufacturing and high demand in construction. Agriculture is also predicted to recover, supported by forecasts of an above-normal monsoon, with investment demand remaining strong, led by public sector investments.
For Southeast Asia, the growth projection is maintained at 4.6% this year, due to solid improvements in both domestic and external demand. The forecast for the Caucasus and Central Asia has been raised to 4.5%, up from the previous estimate of 4.3%, driven by stronger-than-anticipated growth in Azerbaijan and the Kyrgyz Republic. In the Pacific, the growth outlook for 2024 remains at 3.3%, fueled by tourism, infrastructure spending, and revived mining activity in Papua New Guinea.
The ADB remains dedicated to fostering a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while continuing efforts to eradicate extreme poverty. Established in 1966, the ADB is owned by 68 members, 49 of which are from the region.