Asian Development Bank Asia Development Bankin according to the latest forecast, the emerging economies of Asia will grow by around 4.3 percent this year. At the beginning of the year, the bank predicted economic growth of 4.9 percent for the region.
It is significant that the bank predicts only 3.3 percent economic growth for China. If the prediction comes true, it would be the first time in three decades that China’s economic growth falls short of the region’s general economic growth.
According to the bank, the slowdown in China’s economic growth is so strong that it pulls the overall forecast down. If China is not included in the forecast, the Asian region will grow by a total of approximately 5.3 percent in 2022.
The last time China’s growth fell short of the rest of Asia’s emerging economies was in 1990. Then China’s growth slowed to 3.9 percent, while the gross domestic product in the rest of the region grew by 6.9 percent.
China has set an official economic growth target of around 5.5 percent for the current year. China has traditionally always reached its goal in the light of official figures. However, more and more international experts are predicting an economic growth of less than four percent for China.
The bank lowered its 2023 forecast for China’s economic growth to 4.5 percent from April’s forecast of 4.8 percent. As the reason, the bank mentioned the weakening of demand outside of China, which slows down investments in production.
Concerned about Corona and Ukraine
The bank cited the country’s strict corona measures and zero corona strategy as the reasons for the slowdown in China’s economy. According to the bank’s analysis, China’s corona strategy is exceptionally strict compared to other countries in the region. For example, individual curfews implemented as a corona measure significantly hinder economic growth.
As for the rest of Asia’s emerging countries, the bank said the economic recovery will continue as many economies loosen coronavirus restrictions. Global uncertainty, however, weakens the chances of returning to strong and sustainable growth in the region.
As one of the biggest concerns, the bank raises the Russian attack on Ukraine, which has contributed to the increase in food and fuel prices. The tightening of monetary policy in developed economies also poses challenges to growth.
According to the bank, inflation will accelerate in the region with the rise in food and energy prices. Although remittances from the region to their families back home are still at a good level and tourism is recovering, signs of a slowdown are visible. The slowdown can be seen in the weakening of export orders and in the price of the capital needed for investments.