Country’s Growth Likely to Be Stronger than Forecast for FY 2023

The higher forecast of 6% for FY 2023 (which ends on June 30, 2023) from the Asian Development Bank (ADB) reflects strong net exports as imports fell more sharply than expected and export growth slowed less than expected.

All sizes of manufacturing firms benefited from supply-side policies that were supportive of growth. Crop losses brought on by floods, cyclones, and droughts were partially mitigated by subsidies, incentives, and other initiatives.

The service industry benefited from increased warehouse and support activities as well as health and social services.

On the demand side, growth in public investment and consumption was higher than expected.

The ADO April 2023 growth prediction for FY 2024 remains at 6.5%.

The Asian Development Bank (ADB) is maintaining its growth outlook for developing economies in Asia and the Pacific at 4.8% this year, as robust domestic demand continues to support the region’s recovery.

Inflation is expected to continue falling, approaching pre-pandemic levels as fuel and food prices decline, according to the Asian Development Outlook (ADO) July 2023, released on Wednesday.

Inflation in developing Asia is forecasted at 3.6% this year, compared with an April forecast of 4.2%.

The inflation outlook for 2024, meanwhile, is raised to 3.4% from an earlier estimate of 3.3%.

The reopening of the People’s Republic of China (PRC) is bolstering the region’s growth.

The PRC’s economy is projected to expand 5.0% this year, unchanged from the April forecast, amid strong domestic demand in the services sector. However, demand for developing Asia’s exports of electronics and other manufactured goods is slowing, as monetary tightening drags on economic activity in major advanced economies. The region’s growth forecast for next year is marginally revised down to 4.7% from a 4.8% estimate in April.

“Asia and the Pacific continues to recover from the pandemic at a steady pace,” said ADB Chief Economist Albert Park. “Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism. However, industrial activity and exports remain weak, and the outlook for global growth and demand next year has worsened.”

Source: UNB