In the recently released Asian Development Outlook (ADO) 2022 report, ADB estimated that the Asia-Pacific economy will grow at 4.2% this year and 4.6% next year. Meanwhile, the September ADB report predicts that the region’s economy is expected to grow by 43% in 2022 and 4.9% in 2023.
Monetary policy tightening by global and regional central banks, the protracted conflict between Russia and Ukraine and China’s strict epidemic prevention measures are slowing Asia’s developing recovery from the COVID-19 pandemic.
ADB Chief Economist Albert Park said: “Asia-Pacific will continue to recover, but with deteriorating global conditions, the recovery will stagnate as we progress. Governments will need to work more closely together to overcome the ongoing challenges of COVID-19, the impact of high food and energy prices, particularly on the poor and vulnerable, and ensure a comprehensive and inclusive economic recovery.”
ADB has cut its inflation forecast for developing countries in Asia and the Pacific this year from 4.5% to 4.4%. However, the bank raised its forecast for next year from 4.0% to 4.2% due to continued inflationary pressures from energy and food prices.
For Southeast Asia, ADB forecasts that the region’s growth will increase from 5.1% to 5.5% in 2022 amid a strong recovery in consumption and tourism in Malaysia, the Philippines, Thailand and Vietnam. However, the economic growth forecast for Southeast Asia for next year has dropped from 5% to 4.7% due to weak global demand.
Although the Vietnamese economy is performing well in the context of global economic uncertainty, risks to the economic outlook are increasing. ADB raised its economic growth forecast for Vietnam to 7.5% this year. The inflation forecast for 2022 will be adjusted to 3.5%.
As trade continues to grow, there are signs that global demand for Vietnamese exports is declining. Therefore, Vietnam’s economic growth forecast in 2023 is revised to 6.3% due to the weakening of major trading partners.
In addition to Vietnam, ADB has also downgraded the 2023 growth forecast of other Southeast Asian countries. In particular, Malaysia’s economic growth forecast is downgraded from 4.7% to 4.3% due to the impacted global conditions. Similarly, ADB also lowered its 2023 growth forecast for Singapore, Thailand and Indonesia to 2.3%, 4.2% and 4.8% respectively.