ADB raises Asia-Pacific growth forecast for 2024 to 5pc

Strong domestic demand and electronic export growth drive economic outlook

MANILA:

The Asian Development Bank (ADB) on Wednesday slightly raised its 2024 growth forecast for developing Asia and the Pacific to 5 per cent from 4.9 per cent, reflecting the region's accelerated growth in the first quarter of this year. The growth outlook for 2025 remains at 4.9 per cent.

In its latest supplement to the Asian Development Outlook 2024, the ADB attributed the robust growth to resilient domestic demand and strong export performance, particularly in the electronics sector.

The Manila-based bank increased East Asia's 2024 growth projection to 4.6 per cent, driven by strong exports of semiconductors and other goods amid the artificial intelligence boom. The 2025 projection for East Asia is maintained at 4.2 per cent.

The growth forecast for Southeast Asia remains unchanged at 4.6 per cent for 2024 and 4.7 per cent for 2025, while the Pacific region's forecast is steady at 3.3 per cent for 2024 and 4 per cent for 2025.

South Asia's growth forecast holds steady at 6.3 per cent for 2024, with a slight dip in the 2025 projection to 6.5 per cent.

The outlook for the Caucasus and Central Asia has been revised upward to 4.5 per cent from 4.3 per cent for 2024, and to 5.1 per cent from 5 per cent for 2025.

Headline inflation in developing Asia is projected to ease further from 3.3 per cent last year to 2.9 per cent this year, with expected stabilising at 3.0 per cent in 2025.

However, the ADB cautioned that "interest rates in the United States and other advanced economies continue to shape the outlook, which is subject to several downside risks." These risks include uncertainty about the US election outcome, elevated geopolitical tensions, trade fragmentation, and weather-related events, all of which could adversely impact growth.