ISLAMABAD: The Asian Development Bank has downgraded economic growth in developing Asia to 5.6 per cent in 2016, below its previous projection of 5.7pc. However, for 2017, growth remains unchanged at 5.7pc.
In a supplement to its ‘Asian Development Outlook’, ADB maintained that GDP growth in Pakistan is expected to be on track during the fiscal year ending June 2017, driven mainly by the service sector.
In the previous Outlook published in March, the ADB forecast said that GDP growth in Pakistan was expected to accelerate modestly to 4.5pc in fiscal year 2016 and 4.8pc in fiscal year 2017.
“Asian economies continue their robust expansion in the face of global economic uncertainties,” said ADB Deputy Chief Economist Juzhong Zhuang. “Structural reforms to boost productivity, improve investment climate, and support domestic demand can help maintain growth momentum into the future.”
Combined growth for major industrial economies exceeded expectations in the update, ticking up 0.1 percentage point to 1.5pc in 2016. Growth in 2017 is maintained at 1.8pc.
Robust consumer spending supported the US economy, with supportive monetary policy and improved labour markets fueling growth in the euro area. Japan’s expansion, meanwhile, will be buoyed by strong exports, despite the stronger local currency.
The ADB has downgraded the forecast in South Asia from 6.9pc to 6.6pc in 2016. Growth will bounce back in 2017, reaching 7.3pc.
India’s tempered growth projection to 7.0pc from the previously forecast 7.4pc in 2016 is due to weak investments, a slowdown in the country’s agriculture sector, and the lack of available cash due to the government’s decision to ban high-denomination banknotes.
The forecast in East Asia is maintained for 2016 and 2017. Growth this year will reach 5.8pc, with a slight moderation to 5.6pc in 2017. Growth in China, the world’s second largest economy, is expected to hit 6.6pc this year, driven by strong domestic consumption, solid wage growth, urban job creation, and public infrastructure investment.
In Southeast Asia, growth forecasts remain unchanged at 4.5pc in 2016 and 4.6pc in 2017, with Malaysia and the Philippines expecting stronger growth due to a surge in domestic consumption and public and private investment, compared to lower growth forecasts in Brunei Darussalam, Myanmar, and Singapore.
The outlook in Central Asia is maintained at 1.5pc in 2016 and 2.6pc in 2017, as the ongoing recession in the Russian Federation and low global commodity prices for oil and natural gas continue to dampen growth in the sub-region.
The Pacific will see growth of 2.7pc in 2016, picking up to 3.3pc in 2017. The fiscal contraction in Papua New Guinea, the Pacific’s largest economy, and recovery from recent cyclones have weighed on growth in the sub-region. While cyclone damage in Fiji has had a bigger impact on its growth outlook than previously envisaged, prospects for Samoa, Kiribati, and Tuvalu are improving through improvements in fisheries, infrastructure, and tourism.
Courtesy : Dawn News