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ADB Hikes Growth Forecasts for Asian Regions

MANILA — The Asian Development Bank on Tuesday upgraded its economic growth forecasts for the region, which the bank said was proving to be more resilient to the global downturn than it initially expected.

The Manila-based bank said economic expansion in developing Asia was expected to now come in at 3.9 per cent in 2009, up from its original forecast of 3.4 per cent.

In 2010, the growth projection was upgraded to 6.4 per cent from 6 per cent, it said in an update on its annual Asian Development Outlook report.

“Stronger growth in East Asia and South Asia underpinned the improved prospects,” the bank said in a statement.

It also attributed the upgrade to firm action by many governments and central banks to the global economic crisis, the relatively healthy state of financial systems prior to the crisis and the rapid turnaround in the region’s larger, less export-dependent economies.

“Despite worsening conditions in the global economic environment, developing Asia is poised to lead the recovery from the worldwide slowdown,” bank chief economist Jong-Wha Lee said.

Economic growth forecast in East Asia was upgraded to 4.4 per cent from 3.6 per cent. China alone is now expected to grow by 8.2 per cent in 2009 and 8.9 per cent in 2010, up from the March forecast of 7 per cent and 8 per cent, respectively. “A shallower contraction in South Korea is also expected on the back of effective fiscal stimulus measures,” the report added.

However, the economies of Hong Kong and Taiwan were likely to shrink more sharply on account of severe drops in demand for their exports, it said.

The bank said prospects for South Asia improved with growth expected to hit 5.6 per cent this year, up from the initial forecast of 4.8 per cent.

“Emerging signs of a recovery in private business confidence and a continued large fiscal stimulus announced in the July 2009 budget helped bolster India’s projected economic expansion to 6 per cent this year, upgraded from 5 per cent,” it said. —