Trade war, Brexit could slow developing Asia’s 2019, 2020 growth: ADB , Latest Business News - The New Paper

Trade war, Brexit could slow developing Asia’s 2019, 2020 growth: ADB

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MANILA: Growth in developing Asia could slow for a second straight year in 2019 and lose further momentum in 2020, the Asian Development Bank (ADB) said yesterday, warning of rising economic risks from a bitter Sino-US trade war and a potentially disorderly Brexit.

Developing Asia, which groups 45 countries in the Asia-Pacific region, is expected to grow 5.7 per cent this year, ADB said in its Asian Development Outlook report, slowing from a projected 5.9 per cent expansion in 2018 and 6.2 per cent growth in 2017.

The 2019 forecast represents a slight downgrade from its December forecast of 5.8 per cent. For 2020, the region is forecast to grow 5.6 per cent, which would be the slowest since 2001.

"A drawn out or deteriorating trade conflict between the People's Republic of China and the United States could undermine investment and growth in developing Asia," Mr Yasuyuki Sawada, ADB's chief economist, said in a statement.

The lender also cited uncertainties stemming from US fiscal policy and a possible disorderly Brexit as risks to its outlook because they could slow growth in advanced economies and cloud the outlook for the world's second largest economy.

"Though abrupt increases in US interest rates appear to have ceased for the time being, policy makers must remain vigilant in these uncertain times," Mr Sawada said.

China's economy will probably grow 6.3 per cent this year, the ADB said, unchanged from its December projection, but slower than the country's 6.6 per cent expansion in 2018.

By region, South Asia will remain the fastest growing in Asia Pacific, with the ADB predicting an expansion of 6.8 per cent this year - lower than its previous forecast of 7.1 per cent - and 6.9 per cent next year.

This year's growth forecast for South-east Asia was trimmed to 4.9 per cent. - REUTERS