STRONG EXPORT DEMAND TO LIFT ASIA

ADB expects region to grow 5.9pc this year and 5.8pc next year

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, said the Asian Development Bank (ADB) yesterday.

The region should now grow by 5.9 per cent this year and 5.8 per cent next year, said the lender in a report.

The bank updated its earlier forecasts, released in April, that predicted 5.7 per cent growth for the region this year and next.

“Unanticipated external demand has improved growth prospects for developing Asia,” said ADB.

“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 per cent last year.

China’s economy grew by stronger than expected 6.9 per cent in the first half this year, which should help it expand by 6.7 per cent this year and 6.4 per cent next year, it added.

The growth outlook for the manufacturing dynamos of East Asia is brighter, with South Korea energised by receding political uncertainty with the election of a new president, it said.

ADB maintained its 7.4 per cent growth forecast for India this year and 7.6 per cent for next year, 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 per cent growth this year and 5.0 per cent next year, helped by high firstquarter growth in Malaysia, the Philippines and Singapore, said the ADB.

It upgraded its forecast growth for the former Soviet republics of Central Asia, with Armenia, Kazakhstan and Tajikistan uplifted by manufacturing and mining.

ADB 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 per cent, and by 0.2 percentage points next year to 3.0 per cent.

“Ample supply has held world oil prices low despite rising demand, while favourable weather has kept food prices stable.” AFP