MANILA: The Asian Development Bank (ADB) expects stabilization of Pakistan’s economy in current fiscal year while predicting slower growth than expected for developing nations of Asia.
In its Asian Development Outlook Supplement, the Manila-based lender assesses slower growth in Asia this year and next, citing weakening domestic investment due to external factors such as the U.S.-China trade war for its 5.2 percent expansion forecast.
Asian Development Bank (ADB) has revised its initial growth forecast of 5.7 percent for 2019 and 5.6 percent for 2020, which it subsequently trimmed down last September to 5.4 percent and 5.5 percent, respectively, for developing Asia, an ADB region that groups 45 member economies that include China and India.
The report said China’s economic growth is projected to slow to 6.1 percent this year, and 5.8 percent in 2020, from actual growth of 6.6 percent in 2018.
The report expects stabilization in Pakistan’s economy this year.
India’s growth forecast is also reduced to 5.1 percent for this year, from the earlier projection of 6.5 percent last September.
“Also, consumption was affected by slow job growth and rural distress aggravated by poor harvest. Policy support will help growth recover to 6.5 percent in 2020,” it added.
“The main risks to the outlook are a surprisingly abrupt slump in domestic consumption and any worsening of the global growth slowdown or trade tensions,” the report said about Japan.
Inflation in developing Asia, meanwhile, is projected to go up to 2.8 percent this year and 3.1 percent next year, from the September forecast of 2.7 percent this year and next. The inflation rate in Pakistan in first quarter of the current fiscal year remained at 10 percent.