ADB cuts GDP forecasts for Asian economies
HONG KONG: Slower growth in China and India and uncertainty over the United States Federal Reserve's (Fed) stimulus programme is hurting Asia's economic momentum, the Asian Development Bank (ADB) said, as it cut its forecast for the region.
In an update to its annual Asian Development Outlook published in April, the bank tipped regional gross domestic product to grow six percent this year, compared with its earlier forecast of 6.6 per cent. Growth in 2012 was 6.1 per cent.
It also trimmed its 2014 estimate to 6.2 per cent from the 6.7 per cent previously stated.
Asian economies have seen a marked slowdown this year owing to a troubled first six months in China while India has been hit by political paralysis, rising inflation and a slumping rupee.
On top of this are worries about the Fed's massive bond-buying programme, which saw a huge investment splurge in emerging economies when unveiled late last year but which the central bank is now considering winding down.
The ADB cut its 2013 forecasts for China to 7.6 per cent, well down from its April estimate of 8.2 per cent.
India is seen growing 4.7 per cent this year, compared with six per cent forecast previously.
Growth for Southeast Asia is seen at 4.9 per cent, from 5.4 per cent, as it is hampered by the performances of its three biggest economies - Thailand, Malaysia and Indonesia - which are seeing "lacklustre exports and moderating investment".
Despite the cuts, ADB said Asian economies can ride out the storm when the Fed finally begins easing its bond-buying, with even those most at risk - India and Indonesia- holding enough currency reserves for rough times. Agencies