Asia Growth Inching Upward, Despite Drag from India

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--In April, the Asian Development Bank (ADB) (Manila, Philippines) projected India's growth in the 2012-13 financial year at 7%. But the bank lowered its estimate to 6.5% in July and then to 5.6% in October. The bank has now cut the forecast to 5.4%, giving falling global demand and the impact of a delayed monsoon on agricultural production as reasons.

According to the ADB, "India's growth forecast is revised from 5.6% to 5.4% for 2012 and from 6.7% to 6.5% for 2013." This is the fourth time that the bank has cut growth estimates for India.

According to the Reserve Bank of India (RBI), the country's economic growth fell to a nine-year low of 6.5% in 2011-12 and is expected to be 5.8% in the current fiscal year.

For developing Asia, which comprises 45 nations, ADB lowered its 2012 growth forecast marginally to 6% from 6.1% and downgraded the growth outlook for 2013 to 6.6% from 6.7%.

In Southeast Asia, economic growth was stronger than expected through the third quarter of the year in Malaysia and the Philippines. Malaysia's domestic demand continued to be strong, driven by private consumption and both private and public investment.

In the third quarter, growth in the Philippines' economy beat expectations and accelerated to 7.1%, compared with 3.2% in the same period last year. (This was before the catastrophic typhoon and floods struck. -- industrialinfo.com) The strong third quarter performance was driven by services supported by sustained, accelerating growth in industrial output. "Private consumption and investment, particularly in construction, held up well," the ADB said.

The entire developing Asia region (which grew 7.2% in 2011) was revised downward from 6.1% to 6% for 2012, and from 6.7% to 6.6% for 2013.

Robust private consumption in Southeast Asia and a mild economic recovery in China nearly balanced out the weaknesses in India's economy, the ADB said.

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