Asia Development Bank 2022 Forecasts: Developing Asia GDP to Grow 5.2%, Southeast Asia to Grow 4.9%
8th April 2022 | Hong Kong
Asian Development Bank (ADB) has released the 2022 economic forecasts, with GDP in Developing Asia to grow 5.2% and Southeast Asia to grow 4.9% in 2022. Asian Development Outlook: “GDP growth in developing Asia is expected to stay strong, at 5.2% in 2022 and 5.3% in 2023. The pace of the recovery, however, varies across subregions. But in general, regional growth is being supported by a robust recovery in domestic demand in economies that are continuing to catch up with their pre-pandemic trend, particularly in South Asia. Here growth will remain strong in 2022 at a forecast 7.0%, accelerating to 7.4% in 2023. East Asia almost converged to its pre-pandemic trend in 2021 and growth rates are expected to normalize to 4.7% in 2022 and 4.5% in 2023. Growth rates in the other subregions will return to their pre-pandemic averages this year or next.” More info below |View: Report
“ Developing Asia GDP to Grow 5.2%, Southeast Asia to Grow 4.9% “
Asian Development Outlook (ADO) 2022: Key Messages
- The Russian invasion of Ukraine has heightened uncertainty and unsettled commodity markets.
- The pandemic persists, fueled by the Omicron variant. Milder health impacts and vaccination progress have allowed economies to remain more open than in previous waves.
- GDP in the region will expand by 5.2% in 2022 and 5.3% in 2023, on continued recovery in domestic demand and solid exports. Inflation will rise to 3.7% in 2022 and 3.1% in 2023.
- Risks include escalation of Russia’s invasion of Ukraine, financial instability triggered by the Fed’s aggressive tightening, emergence of more lethal COVID-19 variants, and disruptions associated with the People’s Republic of China’s (PRC’s) current outbreaks.
- The theme chapter shows how developing Asia must mobilize taxes for development, and provides policy solutions consistent with economy-specific circumstances and priorities.
Developing Asia Outlook
GDP growth in developing Asia is expected to stay strong, at 5.2% in 2022 and 5.3% in 2023. The pace of the recovery, however, varies across subregions. But in general, regional growth is being supported by a robust recovery in domestic demand in economies that are continuing to catch up with their pre-pandemic trend, particularly in South Asia. Here growth will remain strong in 2022 at a forecast 7.0%, accelerating to 7.4% in 2023. East Asia almost converged to its pre-pandemic trend in 2021 and growth rates are expected to normalize to 4.7% in 2022 and 4.5% in 2023. Growth rates in the other subregions will return to their pre-pandemic averages this year or next.
Inflation
Inflation in developing Asia stayed below the global trend in 2021, but is expected to rise. Because of relatively low food inflation, less severe supply disruptions, and the incomplete recovery, regional inflation remained moderate at 2.5% last year. Price pressures were less broad-based than in advanced economies, including the US where inflation averaged 4.3%, and emerging economies in Latin America and the Caribbean, and Sub-Saharan Africa, where prices increased by 9.3% and 10.7%, respectively. Inflation in developing Asia this year and next will be driven by continuing recovery and elevated energy and commodity prices. The regional inflation rate is forecast to rise to 3.7% in 2022, before dipping to 3.1% in 2023. Headline inflation is expected to accelerate in all subregions but the Caucasus and Central Asia. Monetary authorities should keep a close watch for incipient inflationary pressures.
The Economic Fallout of the Russian Invasion Will Most Affect the Caucasus and Central Asia
The Russian invasion of Ukraine has upended the global economic outlook and greatly amplified uncertainty for a world economy still contending with COVID-19. The war’s outbreak in late February severely disrupted global economic conditions. Shockwaves have been felt in financial and commodity markets, and energy and food prices have spiked sharply and threaten to remain elevated or rise further. The highly uncertain outcome of the invasion is an additional hurdle for developing Asia’s economies, many of which are still grappling with COVID-19.
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