Pan Asia: ADB raises growth forecasts for Asia on exports revival – 26 Sep 2017

  • A rebound in global trade and improved prospects for China have provided a boost to Asian economies, prompting the Asian Development Bank to raise its growth forecast for the region.
  • The ADB has upped its forecast for GDP growth in developing Asia – comprising 45 countries in Asia Pacific – to 5.9% in 2017 from 5.7% in an update to its Asian Development Outlook. It also revised its forecast GDP growth for developing Asia for 2018 to 5.8% from 5.7%.
  • Growth has been supported by a revival in trade with the dollar value of the region’s exports jumping 11% in Jan-May 17, compared to Jan-May 16, the bank said. The lift in exports comes after two straight years of falling export values on falling commodity prices and subdued demand.
  • The ADB increased its forecast for Chinese GDP growth to 6.7% in 2017 from 6.5% and upped its estimate for 2018 to 6.4% from 6.2%. The bank pointed to expansionary fiscal policy and unanticipated external demand as leading this growth
  • India’s growth is expected to slow to 7% in 2017, from 7.1% in 2016, the ADB forecast, after a new national goods and services tax dampened manufacturing.
  • Potential risks for the region include the US Federal Reserve’s plan to normalise its balance sheet, as the unwinding “may drain capital from the region, which would challenge Asia’s financial stability in different ways”.

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