Trade tensions, weaker investment and rising inflation have further weighed on the economic outlook for Asia-Pacific over the past three months, the Asian Development Bank (ADB) said.
Developing economies in Asia are forecast to grow by 5.2pc in both 2019 and 2020, down from the ADB's previous predictions in September of 5.4pc and 5.5pc growth, respectively.
Growth in the region's biggest economy, China, is now seen at 6.1pc this year and 5.8pc in 2020, down from forecasts of 6.2pc and 6pc, respectively, made three months earlier. The impact of the US-China trade war, a global economic slowdown and rising inflation because of higher pork prices have hit the outlook for China. But growth could accelerate if a trade deal is reached.
The ADB made the sharpest revisions to its growth forecasts for India, where GDP is now expected to increase by 5.1pc this year, down from its previous forecast of 6.5pc. A credit crunch, weak job growth and a poor harvest are to blame for the slowdown. India's economic growth is likely to pick up to 6.5pc in 2020, although this is still down from the bank's September forecast of 7.2pc.
Prolonged trade tensions remain the biggest risk to the ADB's outlook. The next set of bilateral tariffs in the US-China trade war is due to take effect on 15 December, although the US may delay the imposition of at least some of the tariffs regardless of the outcome of trade talks.
A bearish outlook for oil — with the ADB forecasting average Brent crude prices at $63/bl this year and $60/bl in 2020 — and falling food prices are curbing inflation for the region as a whole. But surging meat prices in China are putting upward pressure on inflation in east Asia.
Japan and the US are the largest shareholders in the Philippines-based ADB, which lends to social and economic projects in the region.
By Kevin Foster
