Asia to grow as expected in 2018 and 2019, trade war poses downside risks: ADB

People stand on the Ciliwung river banks in Jakarta, Indonesia. REUTERS/FILE

The Asian Development Bank expects developing Asia to meet its growth forecasts for this year and next on strong domestic demand and easing inflation pressures, though it warned of downside risks from a rising tide of trade protectionism.

The Manila-based institution, which released an update of its Asian Development Outlook on Wednesday, maintained its 2018 and 2019 economic growth estimates for the region at 6.0 percent and 5.8 percent, respectively.

The ADB also kept its 6.6 percent and 6.3 percent growth projections for China as well as its 7.3 percent and 7.6 percent growth expectations for India for both years.

Early this month, US President Donald Trump and Chinese counterpart Xi Jinping agreed to a 90-day truce on further tariffs as they try to negotiate a deal.

But while the truce was a welcome development, ADB Chief Economist Yasuyuki Sawada said “the unresolved conflict remains to be the downside risk to economic prospects in the region.”

The 2019 growth outlook for Central Asia was raised to 4.3 percent, from the September projection of 4.2 percent, the ADB said, but the forecasts for Southeast Asia and South Asia for next year were lowered to 5.1 percent and 7.1 percent, respectively.

Easing commodity prices and central bank policy actions could cause the pace of inflation in developing Asia to settle at 2.6 percent this year and to 2.7 percent in 2019, the ADB said, down from its 2.8 forecast in September for both years.


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