ADB warns ‘intensified’ risks for developing Asia

FILE PHOTO: Protesters hold placards with slogans during a rally calling on the bank to stop all fossil fuels funded project, in front of the headquarters of Asian Development Bank (ADB) in Madaluyong City on 29 September 2022. (Photo by Ted ALJIBE / AFP)

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 percent this year, the Manila-based lender said, slightly lower than its April estimate of 4.8 percent.

It was faster than the 4.3 percent 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, 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 percent this year from 4.4 percent last year, the ADB said, pointing to the slowdown in China.

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

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

However, weak consumption, a crisis in the massive property sector, and soft demand for China’s exports have 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 percent, year on year. It rebounded the following month.

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