Despite Political Worries, Asia Still World's Economic Powerhouse

In its 2017 Asia Development Outlook report, the bank said while GDP growth was forecast to pick up this year and next, it would remain well below the 5.3% average rate the country achieved in 2011-2015.

The Asian Development Outlook 2017 (ADO) forecasts growth in Tajikistan to come in at 4.8% in 2017, as high loan losses limit bank lending and weak remittances curb consumption, before picking up to 5.5% in 2018.

Inflation, meanwhile, is expected to accelerate to 5.2 per cent in FY2017 and 5.4 per cent in FY2018 as the global economy recovers and commodity prices rebound.

With regard to China, the report said, the overall output is expected to slow to 6.5 per cent in 2017 and 6.2 per cent in 2018, down from 2016's 6.7 per cent.

Myanmar's inflation rate is estimated to rise up to 7.3 percent along with its economic growth in the next two years, local media Voice quoted the Asian Development Bank (ADB) as reporting Friday.

Rising consumer and business confidence and a declining unemployment rate have fuelled United States growth, but uncertainty over future economic policies may test confidence.

The country is expected to have clocked a growth rate of 7.1 per cent in 2016-17, despite apprehensions that the note ban, announced in November a year ago, has dented consumption as well as investment.

ADB officials noted Thursday that the regions combined gross domestic product was projected to expand by 5.7 percent in both 2017 and 2018.


China, which is rebalancing its economy to growth led by consumption rather than exports, is expected to grow 6.5 per cent this year.

The report proposes some policy measures for Asian economies to implement to ward off various risks.

Southeast Asia is forecast to accelerate further, with almost all economies in the region showing an upward trend.

"A continued commitment to reform - especially in the banking sector - will help India maintain its status as the world's fastest growing major economy", he said.

Higher growth in FY18 reflects accelerated infrastructure investment through the China-Pakistan Economic Corridor (CPEC), which is steadily lifting consumer and investor confidence and thereby further catalysing economic activity. "But at the same time, countries with more flexible exchange rate, if they have been operating around the economy potential, it will also have bear higher inflation pressures", Ramayandi said.

The 2017 growth estimate is the same number given in the previous Asian Development Outlook (ADO) report.

Despite the 23.5% rise in jobs overseas for Bangladeshi workers in the first 6 months of FY2017, remittances are expected to sink further by 7.0% in FY2017 and 4.0 percent in FY2018.

The ADB economists, likewise, stressed that the country's strong macroeconomic fundamentals have consistently shielded the economy from external risks and vulnerability in the past five years. Authorities can counter this risk through prudent macro-prudential policies, such as requiring tighter debt-to-income ratios for loans.


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