Developing nations in Asia to grow at 6% in 2017: ADB

Developing nations in Asia to grow at 6% in 2017: ADB

The Asian Development Bank (ADB) has upgraded its gross domestic product (GDP) growth forecasts for the Philippines this and next year on the surge of the government's infrastructure program.

According to the ADB, higher growth in Central, East and Southeast Asia compensated for the deceleration in South Asia, which continued to be the fastest growing region despite slowing down, with forecasts of 6.5 per cent for 2017 and seven per cent for 2018.

Meanwhile, economic expansion in developing Asia will accelerate to 6% in 2017 as stronger than expected exports and domestic consumption continues to fuel growth.

The bank said the recovery of exports in the first nine months of the year as well as the strong contribution of services and manufacturing to the economy also factored into the higher growth forecast.

ADB's growth estimates have come at a time when India's economy grew 6.3% in the September quarter reversing a slowdown of five consecutive quarters.

Fitch Ratings on December 4 lowered its forecast for India's growth for the current fiscal to 6.7 per cent from the earlier projected 6.9 per cent, saying the rebound was weaker than expected.

While GST and demonetisation have undermined growth over the near term, real GDP growth will rise to 7.5 per cent in 2018-19 as disruption fades, according to Moody's.

Other reasons, ADB said, included a positive net exports growth in the January-to-September period and robust business-process outsourcing, finance and real-estate services growth, which accounts for almost 60 percent of Philippine GDP.

"The subregion is benefiting from stronger investment and exports, with accelerating growth for Brunei, Malaysia, the Philippines, Singapore and Thailand", ADB said.

"Countries can further take advantage of the global recovery by investing in human capital and physical infrastructure that will help sustain growth over the long-term", Sawada added.

The Organisation for Economic Cooperation and Development (OECD) has also cut its growth projections for India to 6.7 per cent for 2017-18.

Combined growth for the major industrial economies is revised upward to 2.2% for 2017 and 2% for 2018, due to robust domestic demand in the euro area, and in Japan due to private investment and net exports. Growth projections for the United States remain unchanged at 2.2 per cent in 2017 and 2.4 per cent in 2018. Growth is expected to reach 3.6% in 2017 compared to the 3.3% originally projected.

Further, the ADB said rising commodity prices have not yet driven inflation across the region, with consumer price inflation tame and stable.

The inflation forecast for 2017 is revised up to 4.0 per cent from 3.7 per cent earlier in September.

Related news: