The Asian Development Bank has downgraded its forecasts for growth in the region, citing the war in Ukraine, rising interest rates to combat decades-high inflation, and China’s slowing economy.
The Manila, Philippines-based lending agency revised its estimate for growth in developing Asian economies to 4.3%, down from an earlier forecast of 5.2%. Growth in 2023 was cut to 4.9% from 5.3% in the revised regional outlook released Wednesday.
ADB economists said that for the first time in three decades, other developing Asian economies would grow faster than China’s.
The updated outlook forecast that the world’s second-largest economy would expand at a 3.3% annual pace this year, down from 8.1% in 2021 and far below the ADB’s April estimate of a 5.0% expansion.
The setback represents a long-time slowing of China’s growth coupled with disruptions from outbreaks of COVID-19 and lockdowns and other measures to fight the virus.
India and Maldives were forecast to see the fastest expansions, at 7% and 8.2%, respectively. In Sri Lanka, where a financial crisis has left the country unable to pay its debts and afford imports, the economy is forecast to contract by 8.8%, down from a 3.3% pace of growth last year.
The ADB’s forecast for inflation in Asia remains less severe than in the U.S. and some other economies, at 4.5% in 2022 and 4.0% next year.