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ADB cuts Chinese, Asian growth forecasts
The Asian Development Bank (ADB) on Thursday cut its 2015 and 2016 economic growth forecasts for China and other developing countries in Asia because of a slowdown in the worldâs second biggest economy
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he Asian Development Bank (ADB) on Thursday cut its 2015 and 2016 economic growth forecasts for China and other developing countries in Asia because of a slowdown in the world's second biggest economy.
However, ADB said that improvements in investments and the erasing of bureaucratic obstacles in India's economy would continue to push forward economic growth in the country. On the other hand, ADB also urged New Delhi to continue its reforms.
After slowing down in the first half of this year, China's gross domestic product (GDP) is predicted to stand at 7 percent this year and 8.8 percent in the following year, ADB said in a statement. The figures are lower than its March forecast, which predicted a 7.2 percent growth in 2015 and 7 percent next year.
'Slow economic growth [in China] has tended to have a real effect on other countries in Asia because of the size and close proximity of the relations between China and other countries in the region,' said ADB economist Wei Shang-Jin as quoted by Antara in Jakarta on Thursday.
The analyst added that external demands, which had been weaker than predicted, declines in working age populations and increases in wages were among the factors that had led to a slowdown in the growth of the main economic force in Asia, namely China.
On Wednesday, Beijing said its economy grew by 7 percent from April to June, or similar with the previous three months, and this was in line with what had been targeted for this year. However, such a growth would mark the slowest rate it had experienced since 1990, one year after the Tiananmen Square massacre.
Overall, developing countries in Asia are predicted to grow by 6.1 percent this year and 6.2 percent in 2016, which ADB has said is slower than the 6.3 percent it previously predicted for each of these two years.
ADB also revised down inflation forecasts to 2.4 percent from 2.6 percent this year, while its prediction for 2016 still stood at 3 percent.
The weakening in main industrial countries will bring impacts to economic growth in East Asia, including China, Hong Kong, South Korea and Taiwan, which will decline to 6.2 percent this year instead of the 6.5 percent that been predicted, the bank said. (ebf)
