The Asian Development Bank trimmed its economic growth forecast for developing Asia on Wednesday, with China’s pandemic lockdowns, slowing global demand and the Russian invasion of Ukraine seen as limiting the region’s prospects.

The Philippines-based lender cut its 2022 forecast to 4.2 per cent, down marginally from a 4.3 per cent projection made in September.

Prospects for 2023 also grew dimmer, it said in a report, which lowered the region’s growth forecast to 4.6 per cent from 4.9 per cent.

“Recovery in developing Asia is expected to continue but lose some steam,” the ADB said, referring to the 46 developing member economies that as a whole grew 7.0 per cent last year.

Multiple risks abound as the three main headwinds could worsen, along with geopolitical risks and climate change
ADB report

Chinese lockdowns, the Ukraine war and slowing demand from developed economies for manufactured goods were the main causes, it said.

“Multiple risks abound as the three main headwinds could worsen, along with geopolitical risks and climate change,” it added.

Surging consumer prices in the United States and other advanced economies could prompt central banks to further tighten interest rates, while the Ukraine conflict could further stoke inflation, it added.

With its tough Covid restrictions and unstable property market, China, Asia’s largest economy, is now forecast to grow 3.0 per cent this year and 4.3 per cent in 2023, compared with 3.3 and 4.5 per cent, respectively, in the bank’s September forecasts.

This assumes a gradual easing of the country’s zero-Covid policy.

Beijing announced last week a nationwide loosening of its coronavirus restrictions, allowing home quarantine for confirmed cases and ending large-scale lockdowns.

On a positive note, developing Asia will grow faster this year and next than the rest of the world, while suffering the least from spiking inflation, the report said.

The bank revised downward its inflation forecast for the region to 4.4 this year from 4.5 per cent in its September report but upgraded it for 2023 to 4.2 per cent from 4.0 per cent.