Prospects for growth in Asia are under pressure of slowing growth in China and India - ADB

Almaty. September 22. Silkroadnews - Against the backdrop of weaker growth prospects of the People's Republic of China (PRC) and India, as well as slow recovery in major industrial countries, reduced growth forecast for developing of Asia in 2015 and 2016, reported a new report of the Asian Development Bank (ADB).
"ADB is forecasting growth in gross domestic product (GDP) in the region at 5.8% in 2015 and 6% in 2016, lower than the forecast given in March at 6.3% for both years", - stated in the annual the economic publication "Asian Development Outlook 2015".
Predicted slowdown in the industrial economies to 1.9% in 2015, lower than the March forecast of 2.2%, as consumption and investment remain weak, although there are some positive signs and an improved outlook in the euro area and the continued growth in the United States, the report said.
Southeast Asia, meanwhile, bears the burden of slowing growth in China, one of its key markets, as well as lower demand from industrial economies, where growth in 2015 is projected to be 4.4% and 4.9% in 2016 year.
Growth in Central Asia is projected at 3.3% in 2015 and 4.2% in 2016, down from previous forecasts of 3.5% and 4.5%, respectively, against the background of economic adjustment in the region to lower prices commodities and recession in Russia. Reduced export earnings due to lower prices for oil and gas holding back growth in Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan. Inflation in the region is projected at 8.1% in 2015 and 7.5% in 2016.
The decline in world prices, including oil and food price, remain the price pressure low, and the regional inflation is projected to fall to 2.3% in 2015 to 3% in 2014, although it is expected to further increase in 2016. Net capital outflows from emerging Asian markets, which gained momentum in the first half of 2015, exceeding $125 billion in the first quarter, still causes concern, as investors expected US interest rate to increase in the near future. As a consequence, in the region noted an increase in risk premiums and weakening of exchange rates, which may further hamper growth, the report said.
"Strengthening dollar US is a threat to Asian companies with a large part of the liabilities in foreign currency, and the data indicate that the proportion of foreign currency debt among firms in Vietnam, Sri Lanka and Indonesia, more than 65%. In addition, the deterioration in demand from China for energy, metals and other commodities, as well as the low prices on the global market, causing concern among a number of developing economies in Asia, export-oriented commodities, including Mongolia, Indonesia, Azerbaijan and Kazakhstan" , - the report says.
To counter the impact of higher US interest rates, the authorities in the developing countries of Asia, responsible for monetary policy, must find a balance between the stabilization of the financial sector and stimulation of domestic demand, the report said. Ongoing measures to build liquidity, well-developed domestic financial markets can help to reduce the dependence of the corporate sector on foreign currency loans.