The Asian Development Bank cut its projection for developing Asia’s economic growth on Wednesday, citing China’s pandemic lockdowns, declining global demand, and Russia’s invasion of Ukraine as factors restricting the region’s prospects.
The ADB lowered its 2023 growth forecast for developing Asia, which includes 46 of the bank’s regional members, to 4.6% from 4.9%. The region is expected to complete the year with a 4.2% expansion, somewhat lower than the 4.3% predicted in September.
“Recovery in developing Asia is expected to continue but lose some steam,” the ADB said.
“Three main headwinds continue to hamper recovery in developing Asia: recurrent lockdowns in the People’s Republic of China, the Russian invasion of Ukraine, and slowing global growth,” the bank added in an update to its Asian Development Outlook publication on Wednesday.
At the same time, the bank raised Southeast Asia’s GDP prediction for this year to 5.5% from 5.1%, citing stronger-than-expected domestic consumption. However, growth in the region is expected to slow to 4.7% in 2023 from 5.0% in the prior projection.
Thailand, the second-largest economy in Southeast Asia, is likely to grow 4.0% next year, down from 4.2% predicted in September.
Among the most severe downgrades, the ADB lowered Malaysia’s growth expectation to 4.3% from 4.7% due to sluggish external conditions and lowered Vietnam’s growth outlook to 6.3% from 6.7% due to inflationary pressures.