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The higher estimate of 6.0 per cent for FY 2023 (ending on June 30, 2023) reflects strong net exports as imports fell more sharply than expected and export growth slowed less than expected, says the Asian Development Bank (ADB).
On the supply side, manufacturing firms of all sizes leveraged supportive government policies to contribute to growth. Crop losses to floods, cyclones, and droughts were partly offset by subsidies, incentives, and other measures.
The service sector was buoyed by higher warehouse and support activities and health and social services, reports UNB.
On the demand side, growth in public consumption outpaced expectations, as did public investment.
The ADO April 2023 forecast for growth in FY 2024 is unchanged at 6.5 per cent.
The Asian Development Bank (ADB) is maintaining its growth outlook for developing economies in Asia and the Pacific at 4.8 per cent this year, as robust domestic demand continues to support the region’s recovery.
Inflation is expected to continue falling, approaching pre-pandemic levels as fuel and food prices decline, according to the Asian Development Outlook (ADO) July 2023, released on Wednesday.
Inflation in developing Asia is forecasted at 3.6 per cent this year, compared with an April forecast of 4.2 per cent.
The inflation outlook for 2024, meanwhile, is raised to 3.4 per cent from an earlier estimate of 3.3 per cent.
The reopening of the People’s Republic of China (PRC) is bolstering the region’s growth.
The PRC’s economy is projected to expand 5.0 per cent this year, unchanged from the April forecast, amid strong domestic demand in the services sector. However, demand for developing Asia’s exports of electronics and other manufactured goods is slowing, as monetary tightening drags on economic activity in major advanced economies. The region’s growth forecast for next year is marginally revised down to 4.7 per cent from a 4.8 per cent estimate in April.
“Asia and the Pacific continues to recover from the pandemic at a steady pace,” said ADB Chief Economist Albert Park. “Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism. However, industrial activity and exports remain weak, and the outlook for global growth and demand next year has worsened.”