(VOVWORLD) - The Asian Development Bank (ADB) on Wednesday announced an economic outlook for Asia under which regional economic growth will decrease slightly this year, but increase slightly next year.
 The cargo port in Busan, the Republic of Korea (Photo: AFP/VNA)
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The ADB says that in the first half of this year Asia maintained its growth rate, thanks to a sharp rise in domestic consumption and investment, recovery of tourism, improvements in financial conditions, and the reopening of the Chinese economy.
Albert Park, ADB's chief economist, said that in the second half of this year, Asia’s economic growth will be challenged by weak global demand leading to export declines and by financial instability caused by some major economies increasing interest rates. The El Nino phenomenon and global geopolitical instability may also have negative impacts.
“Growth in developing Asia is projected to rise from 4.3% last year to 4.7% this year, in 2023, which is a marginal downgrade in our forecast compared to our April forecast,” said Park.
The growth forecast for next year for 46 Asia-Pacific economies in the Asia-Pacific excluding Japan, Australia, and New Zealand was revised slightly upwards from 4.7% to 4.8%.
The two leading economies in the region - China and India – are expected to grow 4.5% and 6.7% next year.
Inflation in developing Asia is forecast to ease to 3.6% this year from 4.4% last year, and continue to slow to 3.5% in 2024, giving central banks policy space, but the ADB said interest rate hiking and easing cycles will fluctuate going forward.