The revision was slightly below the previous projection of 5.7 per cent due to a slight slowdown in India, one of developing Asia’s biggest economies. Forecast growth for the entire region next year remains unchanged at 5.7 per cent.
ADB said in a report that India’s surprise demonetization of large banknotes will likely dampen growth this year to 7 per cent from a previous forecast of 7.4 per cent. But South Asia is the most dynamic part of the region, with growth expected at 6.6 per cent this year, down from the previous forecast of 6.9 per cent. South Asia’s growth is estimated at 7.3 per cent in 2017.
The report says regional giant China is on course to grow 6.6 per cent this year and 6.4 per cent in 2017.
East Asia as a whole is seen to expand by 5.8 per cent this year and 5.6 per cent in 2017 as growth stabilizes in line with earlier forecasts.
The report said growth in the major Southeast Asian economies in the third quarter met projections and even surpassed them in Malaysia and the Philippines. The sub-region is forecast to expand by 4.5 per cent in 2016, and picking up to 4.6 per cent in 2017.
“Asian economies continue their robust expansion in the face of global economic uncertainties,” said ADB Deputy Chief Economist Juzhong Zhuang. “Structural reforms to boost productivity, improve investment climate, and support domestic demand can help maintain growth momentum.”
ADB said the combined growth for the major industrial economies exceeded expectations, ticking up 0.1 percentage point to 1.5 per cent in 2016. The growth forecast for 2017 is maintained at 1.8 per cent, with robust consumer spending supporting the U.S. economy, and monetary policy and improved labour markets fueling growth in the euro area.
Japan’s expansion, meanwhile, will be buoyed by strong exports, despite a stronger currency, the report said.