Asian Development Outlook (ADO) September 2023: Economic Forecasts

Economic forecasts have since been updated

Asian Development Outlook (ADO) September 2023: Key Messages

  • This update revises slightly down the region’s growth forecast for this year to 4.7% on slower expansions in South Asia and Southeast Asia. The growth forecast for 2024 is unchanged at 4.8%.
  • Inflation in developing Asia is forecast to decline from 4.4% last year to 3.6% in 2023 and 3.5% in 2024. Much of this year’s decline will be driven by the People's Republic of China (PRC), where the inflation forecast is revised down to 0.7%.
  • Downside risks to the outlook have strengthened. A close watch is needed on the weaknesses in the PRC’s property sector. Across the region, authorities will need to take policy steps to ensure that supply disruptions and the wide-ranging effects of El Niño do not raise food security challenges. Financial stability risks require continued vigilance in vulnerable economies as the era of easy money ends. On a positive note, a faster-than-expected decline in inflation in the United States could boost global prospects.

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Developing Asia Outlook

Robust domestic demand is continuing to support developing Asia’s growth. The reopening of the People’s Republic of China, rebounding tourism, resilient service sectors, healthy money transfers into the region, and stable financial conditions are all helping support economic activity.

Chief Economist Albert Park discusses developing Asia's latest economic outlook.

Director of ADB’s Macroeconomics Research Division Abdul Abiad discusses the latest inflation outlook in Asia and the Pacific.


Growth Outlook by Subregion

Central Asia: GDP Table

Caucasus and Central Asia

Economic activity remained strong in the first half (H1) of 2023, driven by domestic demand, though growth slowed in every country except Kazakhstan and Tajikistan, compared to H1 2022. Inflation accelerated in Kazakhstan but slowed in the other seven countries as import prices stabilized, allowing some easing of monetary policy. The outlook remains dependent on external factors, including growth in key trade partners, oil prices, the pace of remittances and private transfers, and inflows of tourists and migrants from the Russian Federation.

East Asia: GDP Table

East Asia

Subregional GDP grew at a good pace in the first half of 2023, spurred by the lifting of COVID-19 restrictions in the People’s Republic of China. Nevertheless, the growth projection in this update for aggregate GDP in 2023 is revised down slightly from ADO April 2023. The 2024 growth projection is unchanged. Inflation has slowed more than expected overall, prompting a significantly lower inflation projection for the subregion this year. The inflation forecast for next year is adjusted marginally up.

South Asia: GDP Table

South Asia

Subregional economic growth is forecast to slow in 2023 slightly more than projected in ADO April 2023. It will likely reaccelerate in 2024 as previously forecast. Current growth outlooks for individual economies in the subregion largely confirm earlier projections, except for Nepal, where growth will be significantly lower in 2023. Inflation will be higher than forecast in April, especially in 2024, as domestic demand recovers.

Southeast Asia: GDP Table

Southeast Asia

Growth slowed down for most economies in Southeast Asia. Deceleration reflected the cumulative effects of rising inflation, monetary tightening, and weaker global demand for manufactured goods from key trading partners. However, robust domestic demand and continued recovery of the services sector—particularly tourism—have contributed to better job and income prospects, keeping growth close to its long-run average. Growth in agriculture is also affected by the early onset of El Niño.

The Pacific: GDP Table

The Pacific

The 2023 and 2024 forecasts for growth in the Pacific economy are revised up from ADO April 2023’s projections. A strong recovery in tourism and stimulus-inducing public infrastructure projects have driven faster-than-expected growth, particularly in Fiji, the second-largest economy in the subregion. Capacity constraints exacerbated by the pandemic weigh on the outlook, especially for smaller economies. The inflation forecast is revised down for 2023 and up for 2024. International commodity prices remain elevated and their lagged pass-through to domestic markets is keeping inflation high in many Pacific economies.



Inflation in developing Asia is forecast to decline from 4.4% last year to 3.6% in 2023 and 3.5% in 2024. Much of this year’s decline will be driven by the People's Republic of China (PRC), where the inflation forecast is revised down to 0.7%. Excluding the PRC, average inflation in the region will also be lower, falling from 6.7% last year to 6.3% this year and 4.9% next year. Price pressures, however, remain strong and core inflation is high in the Caucasus and Central Asia and in South Asia, most notably in Pakistan.

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Publication and Links

Asian Development Outlook (ADO) September 2023

Asian Development Outlook (ADO) September 2023

The Asian Development Outlook analyzes economic and development issues in developing countries in Asia. This includes forecasting the inflation and gross domestic product growth rates of countries throughout the region, including the People’s Republic of China and India.