ADB slashes growth forecast for Asia

ADB slashes growth forecast for Asia

ADB slashes growth forecast for Asia

The Asian Development Bank (ADB) yesterday slashed its 2022 growth forecast for developing Asia and warned economic conditions could worsen, as the war in Ukraine and supply chain disruptions drive up prices.

While the impact of COVID-19 had eased, the region was now grappling with the fallout from Russia’s invasion of Ukraine, lockdowns in China and aggressive interest rate hikes, the Philippines-based bank said. To reflect the deterioration across developing Asia, which stretches from the Cook Islands in the Pacific to Kazakhstan in Central Asia, the bank cut its 2022 growth forecast to 4.6 percent.

That compares with its previous prediction in April of 5.2 percent and the 6.9 percent growth chalked up last year.

It also increased its inflation forecast for the region this year to 4.2 percent, from 3.7 percent, due to surging food and fuel prices.

Risks to the outlook “remain elevated”, the bank warned.

The growth forecast for East Asia, which includes China, was cut to 3.8 percent from 4.7 percent, as COVID-19 lockdowns batter the world’s second-biggest economy. In South Asia, the bank lowered its growth forecast to 6.5 percent from 7 percent previously. But the bank revised up its forecast for the Pacific to 4.7 percent, from 3.9 percent, on a surprising rebound in tourism in Fiji.