Asian Development Bank: Asia Set for Strong Growth

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Facts

  • The Asian Development Bank (ADB) stated in its latest growth outlook — published Tuesday — that the Asia-Pacific is expected to have strong economic growth this year following China's reopening after Beijing scrapped its strict 'zero COVID' strategy.1
  • Developing Asia, which comprises 46 economies in the region with the exception of Australia, Japan, and New Zealand, is reportedly set to grow by 4.8% in 2023 and 2024, up from 4.2% in 2022.2
  • Excluding China — whose economy is projected to expand by 5% this year — Asian economic growth is forecast to rise 4.6% this annum, 0.8% slower than the previous year's pace.3
  • In addition to Chinese growth, the Manila-based development bank also highlighted a strong outlook for India, with growth estimated to hit 6.4% this year and 6.7% in 2024.1
  • Based on its forecast that average oil prices will hit $88, the report found that inflation is likely to cool this year and fall further in 2024. Yet, rising demand from China and an oil production cut by OPEC+ could force prices to rise further.4
  • The ADB also stressed that the ongoing war in Ukraine could push prices for commodities, such as oil, gas, and wheat higher, and potentially undermine central bank efforts to curb inflation amid worries over the stability of the global banking industry.5

Sources: 1Al Jazeera, 2Kyodo news+, 3Reuters, 4CNBC and 5Independent.

Narratives

  • Narrative A, as provided by Wall Street Journal. While the world is counting on China to promote economic growth and avoid recession, repeating its role after the 2008 financial crisis, the nature of this rebound cycle is different from past expansions as it will be driven by consumers this time around. The biggest effects of its reopening are to be felt at home in service industries rather than spilling over to the rest of the world.
  • Narrative B, as provided by Xinhua. China's newly adopted measures to prevent and control the pandemic will not only stimulate the Chinese economy at home but also help fuel global economic recovery by expanding market demand. While economic challenges still remain that may threaten global growth, China will proactively seek to stabilize industrial capacity and supply chains while upholding multilateralism.

Predictions