ADB Revised Down Asian Growth Projection In 2024 To 4.9 Percent

JAKARTA - The Asian Development Bank (ADB) revised the decline in Asia's projected economic growth to 4.9 percent in 2024 and 4.8 percent in 2025.

Asia's growth prospects have grown slightly to 4.9 percent for 2024 and 4.8 percent for 2025. Partly due to the limited impact expected from Trump's new presidency in the near future," said ADB chief economist Albert Park as quoted by ANTARA, Friday, December 13.

Based on the new ADB report in the December 2024 Asian Development Outlook (ADO), the growth driver and dynamics for the remainder of 2024 have generally remained unchanged compared to the September 2024 ADO.

Albert said the projected latest growth was slightly lower, 0.1 percentage points, from September's estimation.

Weaker growth than expected in East Asia and South Asia requires a downward revision of growth forecasts for 2024, which offsets upward revisions to the Treasury and Central Asia, particularly in Azerbaijan, Georgia, Tajikistan, and Uzbekistan, and for Southeast Asia.

For 2025, the downward revision was mainly due to lower projections for South Asia on the prospects for weaker domestic demand. Price pressures are now seen to ease faster.

The inflation forecast for 2024 has been revised to slightly down to 2.7 percent due to slower inflation than expected in most subregions in recent months.

Meanwhile, the inflation prospects for 2025 were cut by 0.3 percentage points to 2.6 percent, reflecting weaker price pressures in East Asia, South Asia, and Southeast Asia.

According to the latest ADB report, the prospect of growth faces a significant risk of decline.

One of the main risks stems from the magnitude and speed of policy shift expected under Trump's second administration.

Higher rates than expected and the United States' comprehensive implementation of China and key trading partners could strengthen trade tensions and fragmentation.

Other risks related to US policies under Trump's administration are attributed to stricter immigration policies than expected, more expansive fiscal policies, US central banks or Feds that have the potential to be more dovish, less environmentally friendly environmental policies, deeper-oriented US international relations, and larger deregulations.

In addition, increasing geopolitical tensions can lead to volatility in global commodity prices and financial markets. Meanwhile, further slump in the Chinese property market could weaken the prospects for growth in the country with Asia's largest economy, which will affect the entire region.