ADB warns 'intensified' risks for developing Asia


20 Sep 2023 10:56 AM

Developing Asia faces "intensified" risks from China's troubled property sector and high-interest rates around the world, the Asian Development Bank said Wednesday, as it trimmed its regional growth expectations.

Gross domestic product is forecast to expand by 4.7 per cent this year, the Manila-based lender said, slightly lower than its April estimate of 4.8 per cent.

It was faster than the 4.3 per cent growth recorded last year.

Developing Asia refers to the multilateral lender's 46 emerging member economies, stretching from Kazakhstan in Central Asia to the Cook Islands in the Pacific.

"Risks to the outlook have intensified," the bank said in its latest update of forecasts for this year and next, noting weaknesses in China's property sector could "hold back regional growth".

Other challenges included high interest rates and threats to food security from the El Nino weather phenomenon and export restrictions imposed by some countries.

Inflation is also expected to drop to 3.6 per cent this year from 4.4 per cent last year, the ADB said, pointing to the slowdown in China.

The bank slashed its China inflation estimate to 0.7 per cent for this year, from its April forecast of 2.2 per cent.

There was a burst of consumer exuberance after China, the world's second-largest economy, lifted its strict zero-Covid policies late last year.

But weak consumption, a crisis in the massive property sector and soft demand for China's exports has complicated the recovery.

Official figures show China briefly slipped into deflation in July for the first time in over two years, with prices falling 0.3 per cent, year on year. It rebounded the following month.




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