MANILA, PHILIPPINES - The Asian Development Bank (ADB) has upgraded its economic forecast for developing Asia after third-quarter data showed a better-than-expected performance by many countries in the region.
In a special assessment of the region released today, ADB said it now expects developing Asia to grow by 4.5% in 2009 and 6.6% in 2010. That marks an increase from the 3.9% and 6.4% it predicted in its Asian Development Outlook (ADO) 2009 Update published in September.
Developing Asia comprises 45 member countries of ADB and covers Central Asia, East Asia, South Asia, Southeast Asia and the Pacific.
"The global economic situation is changing rapidly, necessitating frequent reassessments. The prospects for much of the region look rosier than they did in September when we last did a full study of the region. Fiscal and monetary stimulus policies and a moderate improvement in the G3 economies of Europe, Japan and the US helped East Asia and Southeast Asia in particular," said Jong-Wha Lee, ADB's Chief Economist.
ADB forecasts East Asia - comprising the People's Republic of China (PRC); Hong Kong, China; Republic of Korea; Mongolia; and Taipei,China - will expand by 5.1% this year and 7.3% next year while Southeast Asia is now set to grow 0.6% in 2009 and 4.5% in 2010. Southeast Asia is made up of Brunei Darussalam; Cambodia; Indonesia; Lao People's Democratic Republic; Malaysia; Myanmar; the Philippines; Singapore; Thailand; and Viet Nam.
The forecast for the PRC remains unchanged from September's ADO 2009 Update at 8.2% in 2009 and 8.9% in 2010. Meanwhile, ADB now expects growth in India to be 7.0% this year, one percentage point higher than previously expected, but has kept the 2010 forecast unchanged, also at 7.0%.
"We expect the PRC's economic growth to accelerate next year, but the speed of that upturn will depend on the performance of the global economy. The recovery in the G3 is still soft and there are a number of downside risks," said Mr. Lee. "Meanwhile, India faces some challenges - particularly from rising prices - that the government and central bank will have to consider carefully as they assess policy."
Central Asia now looks set to grow more slowly in 2009 than previously expected largely due to persistent economic weakness in Armenia, but the region should still expand by 3.6% in 2010. The outlook for Pacific economies remains unchanged.
ADB publishes its Asian Development Outlook for developing Asia in March or April and updates those forecasts in the Asian Development Outlook Update the subsequent September. It publishes the Asia Economic Monitor, a study of the 14 economies of emerging East Asia in July and December. The Asia Economic Monitor was also released today.