The Asian Development Bank (ADB) forecasts that economic expansion in developing Asia will accelerate to 6% in 2017 as stronger than expected exports and domestic consumption fuel growth. Excluding Asia’s newly industrialized economies, growth is now expected at 6.5% this year, according to a new ADB report.
In a supplement to its Asian Development Outlook Update 2017 report, ADB upgrades its 2017 growth domestic product (GDP) outlook in the region by 0.1 percentage points compared to its September 2017 forecast, while its 2018 forecast remains unchanged at 5.8%. An unexpectedly strong expansion in Central, East, and Southeast Asia has offset a downward adjustment in South Asia.
East Asia’s growth projection is raised from 6.0% to 6.2% for 2017 on upward revisions for its larger economies. The forecast remains at 5.8% for 2018 as growth in most economies moderates. In the People’s Republic of China (PRC), the growth forecast for 2017 is revised up to 6.8% from 6.7% in the Update in light of expansion faster than anticipated in the third quarter, and despite broadly expected moderation in the fourth quarter. Third quarter expansion hit 6.8% (year on year, here and below, unless otherwise specified), underpinned by resilient consumption. In 2018, consumption will likely remain the primary driver of growth as household incomes rise and consumer confidence stays high. Meanwhile, investment growth will decelerate further, continuing a trend that began in 2013 in response to structural and cyclical factors.
The growth outlook for the major industrial economies of the US, the euro area, and Japan is now forecast to exceed earlier expectations in 2017. Unanticipated gains in the euro area and Japan lift the combined growth outlook for these economies to 2.2% this year from 2.0% in the Update, and to 2.1% from 2.0% for 2018.