ADB trims developing Asia's growth forecast, flags US policy risks

Developing Asia is likely to grow more slowly than previously thought this year and next, and the outlook could worsen if President-elect Donald Trump makes swift changes to U.S. trade policy, the Asian Development Bank said on Wednesday.

Developing Asia, which includes 46 Asia-Pacific countries stretching from Georgia to Samoa - and excludes Japan, Australia and New Zealand - is projected to grow 4.9% this year and 4.8% next year, slightly lower than the ADB's forecasts of 5.0% and 4.9% in September.

The downgraded growth estimates reflect lacklustre economic performance in some economies during the third quarter and a weaker outlook for consumption, the bank said.


Growth forecasts for China remain unchanged at 4.8% for 2024 and 4.5% for 2025, but the ADB lowered its projections for India to 6.5% for 2024 from 7.0% previously, and to 7.0% for next year from 7.2%.

"Changes to U.S. trade, fiscal, and immigration policies could dent growth and boost inflation in developing Asia," the ADB said in its Asian Development Outlook report, though it noted most effects were likely to manifest beyond the 2024-2025 forecast horizon.

Trump, who takes office on Jan. 20, has threatened to impose tariffs in excess of 60% on U.S. imports of Chinese goods, crackdown on illegal migrants, and extend tax cuts.

"Downside risks persist and include faster and larger U.S. policy shifts than currently envisioned, a worsening of geopolitical tensions, and an even weaker PRC (People's Republic of China) property market," the ADB said.

The ADB lowered its inflation forecasts for 2024 and 2025 to 2.7% and 2.6%, respectively, from 2.8% and 2.9% previously, due to softening global commodity prices.

GDP GROWTH 2023 2024 2024 2025 2025

2024 2025

JULY SEPT JULY SEPT

DEC DEC

Caucasus and 5.3 4.5 4.7 5.1 5.2

Central Asia

4.9 5.3

East Asia 4.7 4.6 4.6 4.2 4.2

4.5 4.2

China 5.2 4.8 4.8 4.5 4.5

4.8 4.5

South Asia 6.9 6.3 6.3 6.5 6.5

5.9 6.3

India 8.2 7.0 7.0 7.2 7.2

6.5 7.0

Southeast 4.1 4.6 4.5 4.7 4.7

Asia

4.7 4.7

Indonesia 5.0 5.0 5.0 5.0 5.0

5.0 5.0

Malaysia 3.7 4.5 4.5 4.6 4.6

5.0 4.6

Myanmar 0.8 n/a 0.8 n/a 1.7

n/a n/a

Philippines 6.0 6.0 6.2 6.2

5.5 6.0 6.2

Singapore 1.1 2.4 2.6 2.6 2.6

3.5 2.6

Thailand 1.9 2.6 2.3 3.0 2.7

2.6 2.7

Vietnam 6.0 6.0 6.2 6.2

5.1 6.4 6.6

The Pacific 3.5 3.3 3.4 4.0 4.1

3.4 4.1

Developing 5.1 5.0 5.0 4.9 4.9

Asia

4.9 4.8

INFLATION

Caucasus and 10.2 7.6 6.9 6.8 6.2

Central Asia

6.8 6.2

East Asia 0.6 0.8 0.8 1.6 1.3

0.6 1.1

China: 0.2 0.5 0.5 1.5 1.2

0.3 0.9

South Asia: 8.4 7.1 7.0 5.8 6.1

6.9 5.4

India: 5.4 4.6 4.7 4.5 4.5

4.7 4.3

Southeast: 4.1 3.2 3.3 3.0 3.2

Asia:

3.0 3.1

Indonesia: 3.7 2.8 2.8 2.8 2.8

2.4 2.8

Malaysia: 2.5 2.6 2.4 2.6 2.7

2.2 2.6

Myanmar: 22.0 n/a 20.7 n/a 15.0

n/a

Philippines 6.0 3.8 3.6 3.4 3.2

3.3 3.2

Singapore: 4.8 3.0 2.6 2.2 2.2

2.5 2.2

Thailand: 1.2 0.7 0.7 1.3 1.3

0.5 1.2

Vietnam: 3.3 4.0 4.0 4.0 4.0

3.9 4.0

The Pacific: 3.0 4.3 3.6 4.1 4.1

3.6 4.1

Developing: 3.3 2.9 2.8 3.0 2.9

Asia: 2.7 2.6