The Asian Development Bank slightly lowered the 2012 and 2013 growth forecasts for developing Asia, citing the persisting weakness in the Indian economy and slowdown in the East Asian economies.
According to the Asian Development Outlook released Friday by the ADB, developing Asia is expected to grow 6.0 percent in 2012 and 6.6 percent in 2013, down by 0.1 percent. “Available data through the third quarter of 2012 confirm that, as a whole, developing Asia’s economic growth is cooling compared with last year’s 7.2 percent,” the ADB said in the report.
Meanwhile, the ADB sounded positive about China, which it expects to grow by 7.7 percent in 2012 and 8.1 percent in 2013. The ADB cited that China’s industrial production rose in October compared to that in the previous month, indicating an upswing in the manufacturing output.
The data released last month by the National Bureau of Statistics of China showed that the country’s industrial production, which measures the change in the total inflation-adjusted value of output produced by manufacturers, mines and utilities, rose to 9.6 percent in October, up from 9.2 percent in September and also more than the analysts’ expectation of 9.4 percent.
However, the ADB has concerns about India with its growth forecast lowered to 5.4 percent from 5.6 percent in fiscal year 2012 and to 6.5 percent from 6.7 percent in FY2013. India’s industrial output fell in September compared to that in the same month last year, indicating that the country’s economy is under pressure.
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According to the data released last month by the Ministry of Statistics and Program Implementation, India’s industrial production declined 0.4 percent in September compared to that in the same month last year, down from a 2.3 percent rise in August and also below the analysts’ expectation of a 2.8 percent increase.
The continuing debt crisis in Europe and the weakness in the U.S. economy have also hurt the growth in the developing Asian economies. “Looking ahead, considerable uncertainties remain over the strength of the US economy. Enduring weakness in Europe and the looming ‘fiscal cliff’—with little sign to date of clear resolution—are weighing down prospects for the US economy,” the ADB added.
The ADB has revised the inflation forecast for developing Asia to 4 percent from 4.2 percent in 2012, citing that the international food price situation is expected to ease the inflationary pressures.