Developing Asia’s 2012 growth prospects are being hit by the worsening eurozone crisis and a sluggish recovery in the United States, according to new figures released by the Asian Development Bank.
The bank revised its 2012 growth forecasts for the US and Europe, projecting US economic growth of 1.9 percent, down from 2.0 percent, and saying it expects the eurozone economy to contract 0.7 percent, up from 0.5 percent previously.
The bank said emerging economies were “increasingly vulnerable to weak economic prospects in the US and euro area.”
Slowing growth in Asia’s two largest developing economies, China and India, coupled with the unwinding of policy stimulus in other regional countries have also hit Asian growth prospects, the Manila-based bank said.
“Economic growth in developing Asia moderated during the first half of 2012 as slower growth in the US and euro area reduced demand for the region’s exports,” the report, released Wednesday, said.
“Worries over the economic strength of important developing (Asian) economies have also emerged recently,” it added.
Developing Asian economies will expand by 6.6 percent in 2012 and 7.1 percent in 2013, the bank said, trimming its forecasts for 6.9 percent and 7.3 percent growth made in April.
A fall in net exports, industrial production, and fixed asset investment in China prompted the bank to lower its gross domestic product growth forecast for 2012 to 8.2 percent down from 8.5 percent.
The ADB said India’s prospects were clouded by a combination of high inflation and poor external and internal demand, and lowered its GDP growth forecast to 6.5 percent for 2012 from 7.0 percent previously.
Southeast Asia is likely to escape the worst impacts of the weaker global environment, the ADB said.
“A strong rebound in Thailand, healthy growth in the Philippines, and increasing consumer demand in Indonesia have helped the sub-region,” the bank said in a statement.
The Southeast Asian economies were expected to post growth of 5.2 percent in 2012 and 5.6 percent in 2013, virtually unchanged from predictions made in April.