On Monday (July 18, 2016) the Asian Development Bank (ADB) announced that it corrected it’s 2016 growth projection for developing economies in Asia and the Pacific from 5,7 percent earlier this year to now 5,6 percent. Despite softness from the US economy and short-term market shocks from Great Britain’s vote to exit the European Union, the bank expects the Asian economies’ performance to remain solid this year.
Driven by private consumption, Southeast Asia showed a solid development in the first half of this year. Only Vietnam’s performance was slowed down by a worsening drought causing contraction in the agricultural sector. ADB forecasts for Southeast Asia of 4,5 percent economic growth in 2016 and 4,5 percent in 2017 remains unchanged.
While China is on track to meet earlier growth projections of 6,5 percent in 2016 and 6,3% in 2017, ADB’s expectations for East Asia as a whole are unchanged at 5,7% in 2016 and 5,6% in 2017. According to the Manila-based bank’s latest report, this and next year’s economic growth will be led by South Asia with India likely to meet its projected target of 7,4 percent in 2016 and 7,8 percent in 2017.
ADB added that it’s growth expectations for Asia in 2017 remain unchanged at 5,7 percent. The bank’s chief economist, Shang-Jin Wei explained that the impact of the so-called Brexit vote on the real economy in the short term is expected to be small.