Asian Development Outlook (ADO) Series – serie

The annual Asian Development Outlook provides a comprehensive analysis of economic performance in the past year and offers forecasts for the next 2 years for the 45 economies in Asia and the Pacific that make up developing Asia. This edition sees developing Asia bouncing back from the slowdown in the previous year, buoyed by domestic demand and greater regional trade. Prices are stable but must be monitored amid continued global liquidity. Further, the region’s recovery remains vulnerable to shocks from budget wrangling in the United States, austerity fatigue in the euro area, and border disputes in Asia. To strengthen its resilience, developing Asia must examine its rising energy needs in light of its new role as a major player in commodity markets. Even as regional governments implement policies to restrain demand, they need to aggressively explore new supply sources and technology, and progressively integrate regional energy markets and infrastructure, to ensure that the region rises to the challenges of the Clean Asian Century.

Developing Asia faces considerable headwinds from slow recovery in the major industrial economies and moderating prospects for the large economies of the People’s Republic of China (PRC) and India. Subdued demand from the industrial economies and the PRC has delayed the expected pickup in growth in other parts of Asia, including Southeast Asia’s larger economies. The region must strengthen its resilience under external shocks. Macroprudential policy can engender enough independence in monetary policy to counter destabilizing capital flows, while a well-developed domestic financial system can alleviate dependence on external borrowing and thereby reduce risk from currency depreciation. The region must mobilize untapped resources to give growth a much needed boost. This Update highlights how realizing women’s equal rights and contributions to economic and political life can yield ample benefits. While the region has made considerable progress over the past several decades in closing gender gaps in health and education, much remains to be done to erase them in the labor market. This will both marshal more human resources to boost economic growth and do the right thing for women as individuals.

The annual Asian Development Outlook analyzes economic performance in the past year and offers forecasts for the next 2 years for the 45 economies in Asia and the Pacific that make up developing Asia. Global headwinds notwithstanding, developing Asia will continue to contribute 60% of world growth. This edition highlights the need to invigorate developing Asia’s potential growth, whose decline since its 2007 peak explains much of the region’s growth slowdown since the global financial crisis. To ensure a healthy future for potential growth, Asia must employ the full range of policy responses to augment labor supply, improve labor productivity, enhance institutional quality, and maintain macroeconomic stability.

Growth has held up in developing Asia despite a difficult external environment. The region is expected to grow steadily at 5.7% in 2016 and 2017, the forecasts in this Update unchanged from Asian Development Outlook 2016.While global commodity prices have begun to rebound, inflation remains largely subdued. Consumer prices will likely rise by 2.6% in 2016 and 2.9% in 2017.Continued slow recovery in the United States, the euro area, and Japan presents a clear downside risk to the outlook. Uncertainty about the path of monetary policy in these economies, and the implications this has for capital flows, complicates macroeconomic management in developing Asia. Policy makers globally need to resist moves toward protectionism that would only undermine the recovery.By transitioning to low-carbon growth, developing Asia is poised to reap outsized rewards as an essential player in the global effort to contain climate change.

The annual Asian Development Outlook analyzes economic performance in the past year and offers forecasts for the next 2 years for the 45 economies in Asia and the Pacific that make up developing Asia.Decades of rapid growth transformed developing Asia from a low-income region to middle income. Sustaining growth to power the transition to high income will depend on much greater improvement in productivity. Innovation, human capital, and infrastructure are the three pillars of productivity growth. Supportive institutions and policies, underpinned by macroeconomic stability, can strengthen all three pillars. Asia’s dynamic track record suggests that attaining high income status, while challenging, is achievable.

Developing Asia is forecast to expand by 5.9% in 2017 and 5.8% in 2018, a slight upgrade from projections in Asian Development Outlook 2017. Growth prospects for developing Asia are looking up, bolstered by a revival in world trade and strong momentum in the People’s Republic of China. Rebounds in international food and fuel prices are gentler than expected, helping to contain consumer price pressures. Inflation is likely to dip to 2.4% in 2017, or 0.1 percentage points off the 2016 rate, and pick up to 2.9% in 2018. Risks to the outlook have become more balanced, as the advanced economies have so far avoided sharp, unexpected changes to their macroeconomic policies. Further, the fuel price rise is providing fiscal relief to oil exporters but is measured enough not to destabilize oil importers.

Developing Asia is forecast to expand by 6.0% in 2018, and by 5.9% in 2019. Excluding Asia’s high-income newly industrialized economies, growth should reach 6.5% in 2018 and 6.4% in 2019.With oil prices edging up and robust consumer demand continuing, inflation is poised to pick up after dipping slightly last year. Consumer prices are projected to rise by 2.9% in both 2018 and 2019, or 0.6 percentage points more than in 2017.Though prospects are firm, risks are clearly to the downside. Protectionist measures and retaliation against them could undermine the recent pickup in trade growth. In response to fiscal stimulus, the United States Federal Reserve may need to raise interest rates faster than currently expected, which could diminish capital flows to developing Asia.

Developing Asia's gross domestic product is forecast to expand by 6.0% in 2018 and 5.8% in 2019. Consumer prices for 2018 and 2019 are projected to rise by 2.8%.Growth in developing Asia has so far held up against external headwinds. The forecast for rising inflation is tempered despite higher global fuel and food prices. Downside risks to the outlook are intensifying. Any escalation of the trade conflict could disrupt cross-border production links.While the region is expected to meet the Asian Development Outlook 2018 forecast of 6.0% growth in 2018, the projection for 2019 has been trimmed by 0.1 percentage points to 5.8%. Excluding Asia’s high-income newly industrialized economies, the region is expected to expand by 6.5% this year and 6.3% in 2019.The Asian Development Outlook series analyzes economic and development issues in developing countries in Asia. This includes forecasting the inflation and gross domestic product growth rates of countries throughout the region, including the People’s Republic of China and India.

Provides a comprehensive analysis of macroeconomic issues in developing Asia, including economic growth projections and prospects by country and region. This year’s theme chapter explores how to strengthen disaster resilience.

Growth in developing Asia is moderating but remains robust. As global trade slows and investment weakens, regional growth forecasts are trimmed from Asian Development Outlook 2019 by 0.3 percentage points for 2019 and by 0.1 points for 2020 compared to April forecasts. The revisions reflect gloomier prospects for international trade and evidence of slowing growth in the advanced economies and the People's Republic of China, as well as in India and the larger economies in East and Southeast Asia.Inflation remains benign in the region, but pressure is building slightly as food prices rise. Inflation across developing Asia is forecast at 2.7% this year and next, or 0.2 percentage points up from April forecasts.

Growth in the region is expected to slow sharply to 2.2% in 2020 under the effects of the current health emergency and then rebound to 6.2% in 2021.Excluding Asia’s high-income newly industrialized economies, growth will drop from 5.7% to 2.4% this year before recovering to 6.7% next year. Headline inflation accelerated in 2019 as food prices edged up but remained low by historical standards. Inflation will climb further to 3.2% in 2020, but declining food prices in the latter half of the year will set the stage for easing inflation in 2021. Downside risks to the outlook are severe, most notably from coronavirus disease 2019 (COVID-19). In these difficult times, when challenges to growth abound, innovation is critical to inclusive and environmentally sustainable growth. While some economies in developing Asia are near or at the global innovation frontier, many others lag behind.This issue of the Asian Development Outlook includes a Special Topic: The Impact of the Coronavirus Outbreak—An Update.

As the COVID-19 pandemic continues to disrupt global economic activity, developing Asia's gross domestic product is now expected to contract by 0.7% in 2020. GDP is projected to grow by 6.8% in 2021.This is the region's first recession in nearly 6 decades. Excluding high-income newly industrialized economies, regional GDP is expected to contract by 0.5% this year before growing by 7.2% next year. Softening demand and subdued food prices will keep inflation benign. The inflation forecast is revised down from 3.2% to 2.9% for 2020 and maintained at 2.3% for 2021.The threat of a prolonged COVID-19 pandemic and a return to more stringent containment measures is the main risk to the outlook. While economies in developing Asia remain resilient, continued policy support is needed to underpin recovery.Physical and mental health is vital to post-pandemic recovery. The report’s theme chapter explores wellness, or the pursuit of holistic health and well-being. It examines the state of wellness in Asia and the Pacific and its growing role in the region’s economy. It discusses how policy makers can promote wellness by creating healthy living environments, encouraging physical activity and healthy diets, and enhancing workplace wellness.

This report presents economic prospects for developing Asia and the Pacific. It includes analysis of the impacts of school closures caused by the pandemic and a theme chapter on financing a green and inclusive recovery.Growth in 2021 is forecast to be strongest in East and South Asia, and more moderate in Central and Southeast Asia and the Pacific. The main risks to the outlook are new virus outbreaks or delays in vaccine procurement and administration. Prolonged unemployment and disrupted education caused by the pandemic could have long-term consequences.To achieve green, resilient, and inclusive recovery, the region needs to mobilize huge sums of capital. Solid evidence associates green and social finance with positive impacts globally and in Asia.This edition's theme chapter on financing a green and inclusive recovery explores the drivers and impacts of green and social finance and its prospects in the region. Recently, financial gain has joined altruistic motives for investment, which bodes well for future expansion. Policies implemented through regulatory and fiscal measures can further accelerate the development of green and social finance.

Forecasts growth in developing Asia of 7.1% in 2021 and 5.4% in 2022 in an uneven recovery caused by divergent growth paths. Its theme chapter explores sustainable agriculture. Growth forecasts are revised up for East Asia and Central Asia from the projections made in April, but down for South Asia, Southeast Asia, and the Pacific.

This report outlines economic prospects in developing Asia amid global turbulence and lingering pandemic risks. It discusses the implications of school closures and the invasion of Ukraine, and explores mobilizing taxes for development.Developing Asia's outlook remains positive, with growth of 5.2% expected in 2022 and 5.3% in 2023. Downside risks include spillover from geopolitical tensions, such as via higher-than-expected commodity prices. The Russian invasion of Ukraine has upended the global economic outlook and greatly amplified uncertainty for a world economy still contending with COVID-19. Aggressive monetary policy tightening in the United States could lead to financial instability. In the medium term, scarring from the pandemic poses significant risks, including learning losses from continued school closures that could worsen economic inequality.The region's economies urgently need to mobilize fiscal resources to restore the health of public finances and build a more inclusive and sustainable future. Opportunities to strengthen revenue will depend on specific circumstances, but more efficient value-added tax and better-optimized tax incentives hold promise for many economies. Strengthening personal income and property taxes can raise additional revenue and make tax systems more progressive. Significant opportunities exist to expand the use of tax and other fiscal instruments to tackle environmental and health priorities while raising revenue.

In this report, ADB has lowered its forecasts for economic growth in developing Asia and the Pacific to 4.3% in 2022 and 4.9% in 2023, amid mounting challenges. Its theme chapter looks at how digital entrepreneurship spurs growth and innovation.The region's economy is expected to grow 4.3% this year, compared with ADB's projection in April of a 5.2% expansion, while the growth forecast for next year is lowered to 4.9% from 5.3%. The downward revisions have been driven by increased monetary tightening by central banks, fallout from the protracted Russian invasion of Ukraine, and recurrent COVID-19 lockdowns in the People's Republic of China. Inflation in developing Asia this year is likely to reach 4.5%, up from ADB's earlier projection of 3.7%. The forecast for 2023 is 4.0%, up from 3.1%. While inflation in the region remains lower than elsewhere, supply disruptions continue to push up food and fuel prices.The report's theme chapter looks at the role of entrepreneurship in achieving inclusive growth, and how governments in the region can create a more enabling environment for digital entrepreneurs.

This publication highlights brighter economic prospects for Asia and the Pacific amid ongoing challenges. It forecasts growth across the region's developing economies of 4.8% this year and in 2024, up from 4.2% in 2022.The reopening of the People's Republic of China (PRC) will boost regional economic growth through supply chain linkages and demand for goods and services. Growth in the PRC is expected to rebound to 5.0% this year from 3.0% in 2022. Healthy domestic demand in India will also support regional growth: India is forecast to grow by 6.4% in 2023. Growth in the Caucasus and Central Asia, the Pacific, and Southeast Asia will be lifted as tourism recovers. Meanwhile, headline inflation is expected to decelerate from 4.4% in 2022 to 4.2% this year and 3.3% in 2024.However, higher debt and interest rates have magnified financial stability risks, as evidenced by recent banking sector problems in the United States and Europe. An escalation in the Russian invasion of Ukraine could cause renewed surges in commodity prices, stoking global inflation and inducing further monetary tightening. Further, climate change and global fracturing remain persistent challenges. To confront these challenges, policy makers need to strengthen policies to ensure financial stability and actively support multilateralism to deepen regional cooperation.

This report explores what a global transition to net zero could mean for Asia and the Pacific under a range of climate policy scenarios and provides recommendations.Developing Asia faces a climate policy crossroads. The region is highly vulnerable to climate change, even as it is an increasing contributor to the global climate crisis. This report models emission pathways based on commitments and pledges under the Paris Agreement and compares them with more optimal routes to net zero. It examines required transformations in the energy sector and land use and assesses socioeconomic implications. The report looks at policy costs, climate benefits, air quality co-benefits, and labor market outcomes, and discusses policies for an efficient and equitable transition.