ADB cuts developing Asia growth projection

A pandemic prevention worker in a protective suit approaches an apartment in a building that went into lockdown as coronavirus disease (COVID-19) outbreaks continue in Beijing, December 2, 2022.

MANILA (AFP-Jiji) — The Asian Development Bank trimmed its economic growth forecast for developing Asia on Wednesday, with China’s pandemic lockdowns, slowing global demand and the Russian invasion of Ukraine seen as limiting the region’s prospects.

The Philippines-based lender cut its 2022 forecast to 4.2%, down marginally from a 4.3% projection made in September.

Prospects for 2023 also grew dimmer, it said in a report, which lowered the region’s growth forecast to 4.6% from 4.9%.

“Recovery in developing Asia is expected to continue but lose some steam,” the ADB said, referring to the 46 developing member economies that as a whole grew 7.0% last year.

Chinese lockdowns, the Ukraine war and slowing demand from developed economies for manufactured goods were the main causes, it said.

“Multiple risks abound as the three main headwinds could worsen, along with geopolitical risks and climate change,” it added.

Surging consumer prices in the United States and other advanced economies could prompt central banks to further tighten interest rates, while the Ukraine conflict could further stoke inflation, it added.

With its tough COVID restrictions and unstable property market, China, Asia’s largest economy, is now forecast to grow 3.0% this year and 4.3% in 2023, compared with 3.3% and 4.5%, respectively, in the bank’s September forecasts.

This assumes a gradual easing of the country’s zero-COVID policy.

Beijing announced last week a nationwide loosening of its coronavirus restrictions, allowing home quarantine for confirmed cases and ending large-scale lockdowns.