Asia-Pacific's 2024 economic growth forecast to be 5%: ADB

The Asian Development Bank (ADB) has slightly raised its economic growth forecast for developing Asia and the Pacific this year to 5.0 per cent from a previous projection of 4.9 per cent, as rising regional exports complement resilient domestic demand. The growth outlook for next year is maintained at 4.9 per cent.

Inflation is forecast to slow to 2.9 per cent this year amid easing global food prices and the lingering effects of higher interest rates, according to the latest edition of Asian Development Outlook (ADO).

After a post-pandemic recovery that was driven mainly by domestic demand, exports are rebounding and helping propel the region’s economic growth. Strong global demand for electronics, particularly semiconductors used for high-technology and artificial intelligence applications, is boosting exports from several Asian economies.

“Most of Asia and the Pacific are seeing faster economic growth compared with the second half of last year,” said ADB chief economist Albert Park. “The region’s fundamentals remain strong, but policy makers still need to pay attention to a number of risks that could affect the outlook, from uncertainty related to election outcomes in major economies to interest rate decisions and geopolitical tensions.”

While inflation is moderating toward pre-pandemic levels in the region as a whole, price pressures remain elevated in some economies. Food inflation is still high in South Asia, Southeast Asia, and the Pacific, in part due to adverse weather and food export restrictions in some economies.

The growth forecast for the People’s Republic of China (PRC), the region’s largest economy, is maintained at 4.8 per cent this year. A continued recovery in services consumption and stronger-than-expected exports and industrial activity are supporting the expansion, even as the PRC’s struggling property sector has yet to stabilise. The government introduced additional policy measures in May to support the property market, according to ADO.

The outlook for India, the region’s fastest-growing economy, is also unchanged at 7.0 per cent for fiscal 2024. India’s industrial sector is projected to grow robustly, driven by manufacturing and strong demand in construction. Agriculture is expected to rebound amid forecasts for an above-normal monsoon, while investment demand remains strong, led by public investment.

For Southeast Asia, the growth forecast is maintained at 4.6 per cent this year amid solid improvements in both domestic and external demand. This year’s outlook for the Caucasus and Central Asia is raised to 4.5 per cent from a previous projection of 4.3 per cent, driven in part by stronger-than-expected growth in Azerbaijan and the Kyrgyz Republic. In the Pacific, the outlook for 2024 is maintained at 3.3 per cent growth, driven by tourism and infrastructure spending, along with revived mining activity in Papua New Guinea.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.