MANILA - The Asian Development Bank says the economies of developing countries in Asia are holding up despite stubborn global headwinds, and that earlier forecasts that the countries as a group will grow 5.7 percent in 2016 and 2017 remain unchanged. The group grew 5.9 percent in 2015.
A bank report released Tuesday said China, the world's second-largest economy, is expected to grow by 6.6 percent in 2016 and 6.4 percent in 2017, 0.1 percentage points more than was forecast in March, due to strong fiscal and monetary stimulus to boost domestic demand while external demand remains tepid.
The report says steady progress on reforms is helping India realize its growth targets, with earlier forecasts of 7.4 percent growth in 2016 and 7.8 percent in 2017 unchanged.
The India forecasts take into account a boost in private consumption after recent wage and pension increases and expectations of a healthy monsoon lifting rural incomes. A recovery in private investment will help drive growth to 7.8 percent in 2017, the report by the Manila-based bank said.
Growth in the five largest economies in Southeast Asia was forecast at 4.8 percent in 2016, the same as projected in March, with strong first-half performances in the Philippines and Thailand offset by a cut in forecasts for Indonesia, Malaysia and Vietnam.
Government investment in infrastructure, particularly in Indonesia, the Philippines and Thailand, has countered sluggish export demand and droughts that caused a drop in agriculture output in the first half of the year in the Philippines and Thailand, the report said.
Growth is forecast to accelerate to 5.0 percent in 2017 on expectation of firmer demand from major industrial economies, higher prices for exports, and rising infrastructure investment, it said.