ADB cuts down Asia’s growth forecast
The pandemic-induced lockdown in China, the turmoil in Ukraine, and the high inflation rate in the region all have an impact on the Asian Development Bank’s growth prediction for developing Asia for 2022. Due to COVID-19 restrictions, consumer spending and investment have decreased in this region. Food and gasoline prices have also increased, and the central bank has raised lending rates it expressed caution about global headwinds.
ADB reduced its 2022 growth forecast for developing Asia to 4.3%. Compared with April, the growth forecast was around 5.2%. The region’s exports could also decrease due to a downturn in the world economy. A tight monetary policy could lead to financial instability in the different sectors of this region.
The growth forecast for China was reduced to 3.3% from 5%, as Beijing pursues a zero-Covid strategy which leads to falling in the growth rate of the world’s second-largest economy. Targeted lockdowns and travel restrictions have been implemented by authorities, affecting commerce and causing millions of people to stay at home. Excluding China, the rest of developing Asia will grow at a rate of 5.3%. As a result of Russia’s invasion of Ukraine and supply chain interruptions, the bank has increased its inflation prediction from 3.7 to 4.5 percent.