Asian Development Outlook (ADO) Supplement: A Firmer Growth Outlook for Asia
The growth outlook for developing Asia this year is upgraded to 6.0%, or 0.1 percentage points higher than the rate envisaged in September in Asian Development Outlook 2017 Update.
The unexpectedly strong expansion in Central, East, and Southeast Asia more than offsets a downward adjustment to growth forecasts for South Asia. In 2018, regional growth is expected to slow slightly to 5.8%, as predicted in the Update. Excluding the newly industrialized economies of the Republic of Korea (ROK), Singapore, Taipei,China, and Hong Kong,China, the growth outlook for the region is revised up to 6.5% from 6.4% for 2017 but unchanged at 6.3% for 2018.
The collective growth forecasts in the major industrial economies—the United States, the euro area, and Japan—are revised up to 2.2% from 2.0% for 2017 and to 2.1% from 2.0% for 2018. The upgrade reflects third quarter stronger-than-expected growth in the euro area, supported by domestic demand, and in Japan by private investment and net exports.
- Trade expansion helped firm the outlook for developing Asia to 6.0% growth in 2017 from 5.9% projected in September. Meanwhile, this Supplement retains the 5.8% outlook for 2018. Excluding Asia’s newly industrialized economies, growth is now expected at 6.5% in 2017 and 6.3% in 2018.
- Robust outcomes boosted by exports and domestic consumption lift the growth forecast for East Asia this year from 6.0% to 6.2%. The subregion is on track to meet the 5.8% projection for 2018. The People’s Republic of China is expected to grow by 6.8% in 2017 before moderating to 6.4% in 2018.
- South Asia’s growth projection for 2017 is revised down from 6.7% to 6.5%, with India now seen expanding by 6.7% this fiscal year, or 0.3 percentage points less than previously forecast. The subregional growth outlook for next year is retained at 7.0%.
- Growth in the larger Southeast Asian economies surpassed expectations in the third quarter of this year, benefitting from rising investment and exports. Most now have upgraded growth forecasts, with the subregion projected to expand by 5.2% in both 2017 and 2018.
- Strong recovery in several Central Asian economies has lifted growth projections for the subregion in 2017. Forecasts for the Pacific are largely unchanged.
- Though oil prices rose more than anticipated in September, inflation in the region remains subdued. This Supplement retains earlier inflation forecasts of 2.4% for 2017 and 2.9% for 2018.