Asia's GDP Growth Margins Reduced for 2013-14, Says Asian Development Bank

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--China's slowing growth rate is having a knock-on effect throughout the rest of Asia, the Asia Development Bank (ADB) (Manila) reported this week. The bank brought down its growth forecast for the region from 6.6% to 6.3%.

The Asian Development Outlook report also reduced the growth forecast for 2014 from 6.7% to 6.4%. The current year's forecast is only marginally better than the "relatively sluggish" growth of 6.1% in 2012.

Japan is excluded from the grouping of Developing Asia, which stretches from Central Asia to the Pacific Islands. Reporting a marginally better outlook for the advanced economies, ADB said that Japanese Prime Minister Shinzo Abe's fiscal reforms appeared to be bearing fruit, but this did not lead to stronger demand for Asian exports.

A day before the publication of the ADB report, China said that its economy expanded 7.5% in the second quarter of 2013, following 7.7% in the first quarter and 7.9% in the last quarter of 2012. ADB now sees the Chinese economy growing 7.7% in 2013 and 7.5% in 2014. These forecasts are lower than the April figures of 8.2% and 8%. East Asia is looking at 6.7% for 2013 and 2014, with both Hong Kong and Taiwan hit by the Chinese slowdown.

India's growth forecast was lowered to 5.8% from 6% for 2013, after growing 5% in 2012.

Slower GDP growth contained inflation in the region and expanded global natural gas production contained energy prices. The ADB lowered its inflation forecast for developing Asia to 3.5% for 2013 and 3.7% for 2014 (equal to the 2012 rate).

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