The Asian Development Bank (ADB) wrote in its economic forecast press conference that economic growth in developing countries in Asia this year will be slightly lower than expected. This is due to weakness in China’s real estate sector, and the risks associated with El Niño in the region.
ADB has cut its growth forecast for Asia in 2023 to 4.7% from the 4.8% forecast in July. As for the growth forecast of the Asian economy next year, which consists of 46 countries in the Asia Pacific that exclude Japan, Australia and New Zealand, is slightly increased to 4.8% from 4.7% previously.
ADB Chief Economist Albert Park said that ADB sees Asia’s growth recovering strongly from internal consumption and investment in each country, despite the decreased external demand that will hinder the growth of exporting countries.
ADB has lowered its Asia growth forecast for the East, South and Southeast region this year. China and India are expected to grow 4.9% and 6.3%, respectively, slightly lower than July’s estimates of 5.0% and 6.4%. ADB said in the report that “China’s real estate crisis poses risks and may hinder regional growth”. It also maintained its 2024 growth forecasts for China and India at 4.5% and 6.7%, respectively.
Park also warned regional governments of the challenges they will face in the future, such as food insecurity. This is despite this year inflation in developing Asia that has been falling to 3.6% from 4.4% last year, and will continue to slow to 3.5% in 2024, which will make central banks of each country continue to raise and ease their monetary policy at different rates.
For Thailand, ADB forecasts its GDP growth of 3.5% in this year and 3.7% for next year.