Developing Asia economies set for strong growth, says report

Economic growth in Asia will remain strong this year and the next, according to a recent report.

According to the latest report from the Asian Development Bank (ADB), the developing economies of Asia are set to see robust growth in 2015/16 as the global recovery gains traction and commodity prices remain depressed. It forecasts that there will be steady growth of 6.3 per cent this year and the next, with inflation slowing down to 2.6 per cent in 2015.

It is predicted that soft commodity prices and a recovery in the major industrial economies will support the region’s growth momentum. Furthermore, the gradual deceleration in the Chinese economy is expected to be balanced by the forecast economic pickup in India and most other Southeast Asian nations.

“An environment of low oil prices fuels higher economic growth globally, particularly in the major industrial economies,” the report explained.

“It slows inflation and hence enhances the scope for lower interest rates that can continue stimulating economic activity.”

It’s India’s time to shine, according to Christine Lagarde, head of the International Monetary Fund (IMF). It predicts the Indian economy will grow by 7.2 per cent in 2015 and 7.6 per cent in 2016.

The nation’s pro-business government is in the midst of bringing the nation back to economic prosperity, which has long been held back by overly complex red tape and corruption.

“Both Bangladesh and Pakistan are following through with wide-ranging economic reforms that include efforts to overcome power shortages, though political challenges may limit progress in 2015,” said the report.

Sub-regional growth in the Southeast Asian region is poised for a rebound in 2015, according to the report. It forecasts that economic activity will rise to 4.9 per cent and 5.3 per cent respectively in this year and the next, driven higher on a recovery in Indonesia and Thailand. Furthermore, most of the sub-region is expected to trend upwards on rising exports and lower inflation.