Developing Asia is now forecast to see GDP growth of 5.9% for the year, according to the Asian Development Bank, up from the previous forecast of 5.7%.
ADB released a special 2017 supplement on Thursday to reflect the unexpectedly strong economic performance seen so far this year. The improved outlook has been driven by an uptick in external demand, boosting exports, especially in East Asia.
“The resulting boost to net exports all but suspends growth moderation in the People’s Republic of China, which is now expected to expand by 6.7% in 2017 and 6.4% in 2018,” ADB writes.
After posting two quarters of 6.9% growth, China is set to blow its government target of 6.5% annual growth out of the water and post its first increase over the previous year since 2010.
The forecast for 2018 was also revised up, by a more modest 0.1%, from 5.7% to 5.8%.
- India is expected to achieve April forecasts of 7.4% growth in 2017 and 7.6% in 2018, primarily from strong consumption. Growth projections for South Asia are likewise maintained as prospects remain robust.
- High first quarter growth in Malaysia, the Philippines, and Singapore keeps Southeast Asia on track to meet forecasts of 4.8% growth this year and 5.0% in 2018.
- Central Asia is recovering more strongly than expected, prompting upgraded forecasts in this Supplement. The Pacific will likely realize earlier projections.
- Ample supply has held world oil prices low despite rising demand, while favorable weather has kept food prices stable. This Supplement forecasts inflation in 2017 at 2.6%, revised down by 0.4 percentage points, and at 3.0% next year.
- The combined growth forecast for the major industrial economies—the United States, the euro area, and Japan—is retained from ADO 2017. Although the growth projection for the US this year is now 0.2 percentage points lower in the wake of disappointing first quarter results, upward revisions for the euro area and Japan, supported by robust domestic demand, compensate to maintain the collective forecast.