Manila, Sep 26 (IANS) The Asian Development Bank (ADB) announced on Wednesday that it will maintain its growth forecast for this year in Asia at 6 percent but warned of the fallout of the ongoing trade tensions between China and the US for the region.
Asia’s GDP remained stable thanks to strong domestic demand, especially in China and India, and high oil and gas prices, which benefit energy-exporting countries such as Kazakhstan, the ADB said in a new report, reports Efe.
The escalation in trade tensions will test the region’s recovery, according to the ADB, which advised strengthening trade ties among countries.
For 2019, the ADB has cut its growth prospects slightly to 5.8 percent, according to the latest update of the bank’s annual Asian Development Outlook.
“The biggest risk to continued growth comes from the disruption of international production linkages caused by a further escalation of trade tensions, but Asia’s growth should remain resilient to the direct effects of the trade measures taken to date,” said ADB Chief Economist Yasuyuki Sawada.
Robust domestic consumption and rapid expansion of services helped generate a strong economic performance in the first half of this year in China, where growth prospects for 2018 remain unchanged at 6.6 percent.
The ADB lowered China’s forecast growth to 6.3 percent in 2019 due to the risks of the trade war with the US and despite the monetary and fiscal measures taken by Beijing to help mitigate the impact.
Despite the progressive depreciation of the rupee, India’s economy will maintain its upward trend this year with growth of 7.3 percent and 7.6 percent next year, owing to its demonetization measures and the introduction of a national tax on goods and services.
ADB warned of the slowdown in economic expansion in six of the 10 Southeast Asian countries, which together are forecast to grow 5.1 percent this year and 5.2 percent in 2019.
The high price of oil and gas, coupled with increased exports and investment, has boosted growth in central Asia, where the economy is expected to advance 4.1 percent this year.