ADB slashes 2022 growth forecast for developing Asia to 4.6% as fuel, food prices rise

The Asian Development Bank (ADB) on Thursday lowered its growth forecasts for developing Asia from 5.2 percent to 4.6 percent for 2022 and from 5.3 percent to 5.2 percent for 2023.

The downward revisions to the forecasts made in April reflect worsened economic prospects due to slower expansion in the People’s Republic of China (PRC), more aggressive monetary tightening in advanced economies, and fallout from the continued Russian invasion of Ukraine.

East Asia’s growth forecast is revised from 4.7 percent to 3.8 percent for 2022 due to downgraded 4.0 percent growth in the PRC and softening global demand, the ADB said in a supplement to its Asian Development Outlook report.

South Asia’s growth forecast is lowered from 7.0 percent to 6.5 percent for 2022 and from 7.4 percent to 7.1 percent for 2023 due to the economic crisis in Sri Lanka and high inflation and associated monetary tightening in India, the bank said in its forecast.

The 2022 forecast for Southeast Asia is marginally upgraded from 4.9 percent to 5.0 percent as domestic demand benefits from the continued lifting of Covid-19 mobility restrictions and the reopening of borders in some economies in the subregion.

The Caucasus and Central Asia’s growth prospects are raised from 3.6 percent to 3.8 percent for 2022 and from 4.0 percent to 4.1 percent for 2023, as some economies have withstood the economic fallout from the war in Ukraine better than expected.

This year’s growth prospects for the Pacific are revised up, from 3.9 percent to 4.7 percent reflecting the stronger-than-expected rebound in tourism in Fiji.

The inflation forecast for developing Asia is raised from 3.7 percent to 4.2 percent for 2022 and from 3.1 percent to 3.5 percent for 2023 due to higher fuel and food prices.

Inflation pressures in the region are, however, less than elsewhere in the world.