MANILA - The Asian Development Bank said Wednesday that growth in developing Asia will slow to 5.7 percent this year, down from 5.9 percent in 2018, due to slowing global demand and persistent trade tensions.
In its Asian Development Outlook 2019 report, the bank said growth in the region will further weaken to 5.6 percent in 2020, citing such factors as the continuing moderation of Chinese economic growth.
“A drawn-out or deteriorating trade conflict between the People’s Republic of China and the United States could undermine investment and growth in developing Asia,” Yasuyuki Sawada, the bank’s chief economist, said in the report.
“With various uncertainties stemming from U.S. fiscal policy and a possible disorderly Brexit, growth in the advanced economies could turn out slower than expected, undermining the outlook for (China) and other economies in the region,” he added.
The report said China’s growth will continue to moderate, with 6.3 percent expansion this year and 6.1 percent in 2020, “as restrictions on housing markets and shadow banking continue and as the trade conflict with the U.S. weakens exports.”
It forecasts the combined economies of the United States, Japan and the eurozone will see growth slow to 1.9 percent this year and 1.6 percent in 2020, citing “less accommodative fiscal and monetary policies” in the United States, “uncertainty surrounding Brexit in the United Kingdom and the European Union, and the trade conflict between” China and the United States.
Meanwhile, the bank said inflation in developing Asia remains low, forecasting it at 2.5 percent for both 2019 and 2020.