11:04 | 27/09/2019 Global Economy
The Asian Development Bank (ADB) has revised down its forecast on economic growth in Southeast Asia to 4.5 percent compared with a previous forecast of 4.8 percent and from last year's 5.1 percent pace.
|A garment factory in Vietnam - Photo: VNA|
Growth next year is seen picking up to 4.7 percent, but still lower than the ADB's 4.9 percent estimate in July, the ADB said in its Asian Development Outlook 2019 Update released on September 25.
According to the bank, economic growth in developing Asia remains robust but prospects have further dimmed and risks to the region’s economies are rising due to escalating trade tension between the United States and China.
The report forecasts economic growth in the 45 countries of developing Asia at 5.4 percent this year before nudging up to 5.5 percent in 2020, down from the 5.7 percent and 5.6 percent growth forecast in July.
Growth in the region was 5.9 percent last year.
The US-China trade war could well persist into 2020 while major global economies may struggle even more than anticipated, said Yasuyuki Sawada, ADB's chief economist.
The dispute between the world's two largest economies has dragged on for well over a year, with both adding tariffs worth billions of dollars on each other’s goods.The ADB predicts China's economy to expand 6.2 percent this year, weaker than its 6.3 percent projection in July. Growth in the Chinese mainland is projected to cool further to 6 percent in 2020. China is targeting 6.0 percent to 6.5 percent growth in 2019.
Along with weakening trade momentum, the lender also sees declining investment as a major concern to the region's growth prospects.
Developing Asia will also have to deal with slightly higher prices due to rising food costs, the ADB said. It raised its 2019 and 2020 inflation forecasts for the region to 2.7 percent from 2.6 percent earlier.