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ADB cuts Thai growth outlook

Luxamon Attapich

Luxamon Attapich

THE ASIAN DEVELOPMENT BANK (ADB) yesterday slashed is 2013 growth forecast for Thailand's gross domestic product from the 3.8 per cent projected in October to only 2.9 per cent.

The cut was based on a significant decline in growth in the first three quarters as well as the possible delay of government investment projects and shrinking exports.

ADB chief economist Thailand Luxamon Attapich said the bank had also cut its forecast for next year's GDP growth from 4.9 per cent to 4.7 per cent. Meanwhile, an improving growth outlook in Japan and the United States paired with stronger-than-expected performance in China support a steady growth outlook for developing Asia, the ADB said.

The "Asian Development Outlook Supplement" released yesterday forecast GDP growth of 6.0 per cent for the ADB's 45 developing member countries this year, improving to 6.2 per cent next year. The forecasts are unchanged from the update issued in October.

But a slight moderation is forecast in Southeast Asia. The sub-region is expected to post growth of 4.8 per cent in 2013 and 5.2 per cent in 2014. Both forecasts are down 0.1 percentage point from October to reflect the impact of tensions in Thailand on consumption and tourism. The devastating impact of Typhoon Haiyan is tempering the Philippines' 2013 growth, but reconstruction is expected to boost the economy as it ramps up in 2014.

"Despite uncertainties in the global economic environment, developing Asian economies remain resilient.

The region has performed well in 2013 and is now poised to benefit from the further signs of growth momentum in the advanced economies," said Changyong Rhee, the ADB's chief economist. The economies of the US, the euro area and Japan are on track to meet the October forecast of 0.9-per-cent growth in 2013. The ADB expects 1.9-per-cent growth in these advanced economies in 2014, up 0.1 percentage point from the October forecast.

The outlook for China's GDP growth is increased by 0.1 percentage point to 7.7 per cent in 2013 and 7.5 per cent in 2014 on the back of rising infrastructure investment. This boosts the average East Asian forecast by the same magnitude to 6.7 per cent for both 2013 and 2014 as indicators in other economies in the sub-region are generally in line with October assumptions.

South Asia is on track to meet growth expectations of 4.7 per cent in 2013 and 5.5 per cent in 2014. After bottoming out in the first fiscal quarter, India's economy appears to have recovered on the back of a rebound in exports and higher industrial and agricultural outputs.

India's GDP is seen growing at 4.7 per cent in fiscal 2013 and 5.7 per cent in fiscal 2014, unchanged from the October forecast.

Growth in Central Asia is gradually recovering, with aggregate projections for the sub-region raised from October forecasts to 5.7 per cent from 5.4 per cent for 2013 and to 6.1 per cent from 6.0 per cent for 2014.

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