The Manila-based multilateral funding agency termed the downward revision in growth as ‘modest’.
“On the assumption that global demand will remain sluggish and oil prices elevated, this Update revises down the forecasts for growth to 7.0% for FY2022 (ending in March 2023) from ADO 2022’s 7.5% projection and to 7.2% from 8.0% for FY2023 (ending in March 2024),” said Asian Development Outlook (ADO) 2022 Update.
The report said that growth in South Asia this year is revised down to 6.5% from 7.0% in the earlier projection and to 6.5% from 7.4% for 2023. It further said that this reflects modest downward revisions to India’s forecast on higher-than-anticipated inflation and monetary tightening, and Sri Lanka’s sharp contraction caused by its sovereign debt and balance-of-payment crises.
The ADB said that Developing Asia’s recovery continues but the outlook is worsening. It noted that economic activity is being supported by the continued relaxation of coronavirus disease (COVID-19) restrictions in many economies, but the impact of the Russian invasion of Ukraine, aggressive monetary tightening in advanced economies, and repeated COVID-19 lockdowns in China (PRC) are increasingly shaping the region’s economic prospects.
“Excluding the PRC (China), the rest of developing Asia is projected to grow by 5.3% in both 2022 and 2023—the first time in more than 3 decades that the rest of developing Asia will grow faster than the PRC,” it said.
The latest outlook said that price pressures in developing Asia—while remaining lower than elsewhere in the world—are increasing on higher energy and food prices.