China’s has been hit with a stock market crisis and weak exports this year and its growth is now expected at 6.8% for 2015, down from an earlier projection of 7.2%.
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“The program will be supporting the government’s agenda to make more money available for social protection programs and small businesses in the face of economic contraction caused by economic slowdown in the region”, said Tariq Niazi, Principal Public Management Specialist in ADB’s Central and West Asia Department.
In an update to its flagship Asian Development Outlook (ADO) 2015, the Manila-based lender is now saying that the Philippine gross domestic product (GDP) is likely to grown by 6 percent this year from a forecast of 6.4 percent in the March.
The bank cut the 2015 and 2016 forecasts for Thailand to 2.7 per cent and 3.8 per cent. It previously projected the forecasts at 3.6 per cent and 4.1 per cent, respectively.
“After a slow start to the year we are now seeing a pickup in fiscal spending which combined with spending linked to the May 2016 elections will help lift the domestic economy”, said Richard Bolt, the ADB country director for the Philippines in a briefing held on September 22. ADB said it expects the pressure to ease once the recovery in the world’s advanced economies picks up, strengthening global demand.
Weak monsoon, poor external demand and government’s inability to push reforms including GST and land bills are likely to result in slower economic growth even as inflation has been moderate for sometime.
He added that growth could be driven by greater investments in public goods and infrastructure, robust private consumption, and more jobs.
Current Account Deficit: In FY2015, it has been projected to remain at 1.1% of GDP, well below the highs of recent years.
Housing sales remain strong, but the inventory overhang continues to weigh on real estate investment and, by extension, demand for construction materials and other inputs.
On average, the region is expected to register 4.4 per cent growth rate in 2015 – the same pace as in 2014 but below the previous 4.9 per cent forecast. Emerging markets are facing receding capital flows and depreciating currencies – a trend that may be exacerbated by the upcoming rise in U.S. interest rates. “Implementing macroprudential policies and developing local currency bond markets can bolster financial system resilience and mitigate risks to borrowers”.
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The update said deceleration in India was broad-based, with private consumption, manufacturing and services all experiencing slower growth.
