ADB says developing Asian economies are holding steady

MANILA—Developing economies in Asia are holding steady and will grow at the earlier forecast rate of 5.7 percent this year and next, buoyed by resilience in the region’s two largest economies, China and India, the Asian Development Bank said Tuesday.

The region’s developing economies grew 5.9 percent in 2015, and the bank was retaining its March forecasts, an ADB report said.

China’s economy — the second largest in the world — is forecast to grow by 6.6 percent in 2016 and 6.4 percent in 2017, or 0.1 percentage point more than was forecast in March, due to strong fiscal and monetary stimulus to boost domestic demand while external de- mand remains tepid.

Private consumption and services generated most of the 6.7 percent growth in China in the first half of the year in line with the government’s objective of favoring sustainable growth supported by higher wages and more urban jobs, the report added.

Steady progress on reforms is helping India realize its growth targets, the report said, with earlier forecasts of 7.4 percent growth in 2016 and 7.8 percent in 2017 unchanged.

The India forecasts take into account a boost in private consumption after recent wage and pension increases and expectations of a healthy monsoon lifting rural incomes. A recovery in private investment will help drive growth to 7.8 percent in 2017, the report by the Manila-based lender said.

Growth in the five largest economies in Southeast Asia was forecast at 4.8 percent in 2016, the same as projected in March, with strong first-half performances in the Philippines and Thailand offset by a cut in forecasts for Indonesia, Malaysia and Vietnam.

Government investment in infrastructure, particularly in Indonesia, the Philippines and Thailand, has countered sluggish export demand and droughts that caused a drop in agriculture output in the first half of the year in all of the countries except Indonesia, the report said.