ULAANBAATAR, MONGOLIA - Softer growth prospects for the People’s Republic of China (PRC) and India, and a slow recovery in the major industrial economies, will combine to push growth in developing Asia for 2015 and 2016 below previous projections, says a new Asian Development Bank (ADB) report.
In an update of its flagship annual economic publication, Asian Development Outlook 2015 (ADO 2015), ADB now sees gross domestic product (GDP) growth for the region coming in at 5.8% in 2015 and 6.0% in 2016—below the March forecasts of 6.3% for both years.
The PRC—the world’s second largest economy—has seen growth moderate due to a slowdown in investment and weak exports in the first 8 months of 2015. Growth is now seen at 6.8% in 2015, down from 7.2% projected earlier, and below the 7.3% posted in 2014.
GDP growth in Mongolia declined to 3.0% year-on-year in the first half of 2015, matching ADO’s earlier forecast for the full year. Increased copper concentrate and gold production at the Oyu Tolgoi open pit mine played a major role in mitigating the impact of the growth moderation in the PRC on Mongolia and helped maintain industrial growth at a robust 12.1%.
ADB lowered its growth forecast for 2015 to 2.3%, mainly reflecting the impact of drought-affected harvests on the economy. Growth is expected to recover in 2016 to 3.0% benefiting from the start of underground works at the Oyu Tolgoi mine in mid-2016. Consumer price inflation more than halved to 6.6% year-on-year in August, from a peak of 14.9% in July 2014, reflecting tightened monetary policy.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.