China's property crisis weighs on developing Asia's 2023 growth outlook - ADB

MANILA : Economic growth in developing Asia this year will be slightly lower than previously expected as the weakness in China's property sector and El Niño-related risks cloud regional prospects, the Asian Development Bank (ADB) said on Wednesday.

Updating its regional economic outlook, the ADB trimmed its 2023 growth forecast for developing Asia to 4.7per cent, from 4.8per cent projected in July.

But the growth forecast for next year for the grouping, which consists of 46 economies in the Asia-Pacific and excludes Japan, Australia and New Zealand, was revised slightly upwards to 4.8per cent from 4.7per cent previously.

"We see resilient growth in the region really based on pretty strong domestic consumption and investment, and despite reduced external demand, which is a dampener on export-driven growth," Albert Park, ADB's chief economist, told a press conference.

The ADB tempered its growth forecasts for East Asia, South Asia, and Southeast Asia this year, with China and India expected to grow 4.9per cent and 6.3per cent, respectively, slightly lower than the July growth projections of 5.0per cent and 6.4per cent.

China's property crisis "poses a downside risk and could hold back regional growth," the ADB said in its report.

The Manila-based lender maintained its 2024 growth forecasts for China and India at 4.5per cent and 6.7per cent respectively.

While growth has so far been robust and inflation pressures are receding in developing Asia, Park said governments need to be vigilant against the many challenges the region faces, including food security.

Inflation in developing Asia is forecast to ease to 3.6per cent this year from 4.4per cent last year, and continue to slow to 3.5per cent in 2024, giving central banks policy space, but the ADB said interest rate hiking and easing cycles will vary going forward.

GDP GROWTH 2021 2022 2023 2023 2023 2024 2024 2024

APR JULY SEPT APR JULY SEPT

Caucasus and 5.8 5.1 4.4 4.3 4.6 4.6 4.4 4.7

Central Asia

East Asia 7.9 2.8 4.6 4.6 4.4 4.2 4.2 4.2

China 8.4 3.0 5.0 5.0 4.9 4.5 4.5 4.5

South Asia 8.4 6.7 5.5 5.5 5.4 6.1 6.1 6.0

India 9.1 7.2 6.4 6.4 6.3 6.7 6.7 6.7

Southeast Asia 3.5 5.6 4.7 4.6 4.6 5.0 4.9 4.8

Indonesia 3.7 5.3 4.8 4.8 5.0 5.0 5.0 5.0

Malaysia 3.1 8.7 4.7 4.7 4.5 4.9 4.9 4.9

Myanmar -5.9 2.0 2.8 n/a 2.8 3.2 n/a 3.2

Philippines 5.7 7.6 6.0 6.0 5.7 6.2 6.2 6.2

Singapore 8.9 3.6 2.0 1.5 1.0 3.0 3.0 2.5

Thailand 1.5 2.6 3.3 3.5 3.5 3.7 3.7 3.7

Vietnam 2.6 8.0 6.5 5.8 5.8 6.8 6.2 6.0

The Pacific -1.4 6.1 3.3 3.3 3.5 2.8 2.8 2.9

Developing Asia 7.2 4.3 4.8 4.8 4.7 4.8 4.7 4.8

INFLATION

APR JULY SEPT APR JULY SEPT

Caucasus and 9.0 12.9 10.3 10.6 10.6 7.5 7.8 8.0

Central Asia

East Asia 1.1 2.3 2.3 1.3 1.0 2.0 2.1 2.1

China 0.9 2.0 2.2 1.0 0.7 2.0 2.0 2.0

South Asia 5.8 8.2 8.1 8.1 8.6 5.8 6.4 6.6

India 5.5 6.7 5.0 4.9 5.5 4.5 4.5 4.2

Southeast Asia 2.0 5.1 4.4 4.3 4.2 3.3 3.2 3.3

Indonesia 1.6 4.2 4.2 3.8 3.6 3.0 3.0 3.0

Malaysia 2.5 3.4 3.1 3.1 3.0 2.8 2.8 2.7

Myanmar 3.6 18.4 10.5 n/a 14.0 8.2 n/a 8.2

Philippines 3.9 5.8 6.2 6.2 6.2 4.0 4.0 4.0

Singapore 2.3 6.1 5.0 5.0 5.0 2.0 2.0 3.0

Thailand 1.2 6.1 2.9 2.9 2.5 2.3 2.3 2.3

Vietnam 1.8 3.2 4.5 4.0 3.8 4.2 4.0 4.0

The Pacific 3.1 5.2 5.0 5.0 4.9 4.4 4.4 4.5

Developing Asia 2.6 4.4 4.2 3.6 3.6 3.3 3.4 3.5

(Reporting by Enrico Dela Cruz; Additional Reporting by Mikhail Flores; Editing by Kanupriya Kapoor)