ADB Cuts Growth Forecasts in Developing Asian Countries; Details Released!

by Pebbles Montales / Sep 23, 2015 11:08 AM EDT

News of updated growth forecasts are also published on the bank's official website.

Philippines-based Asian Development Bank (ADB) began lowering its growth forecasts for developing economies in Asia, following reports of the slowing economic growth in countries China and India.

Revising from their earlier March forecast of 6.3% both for this year and in 2016, the said region is now expected to gain an economic growth by 5.8% by the end of 2015 and 6% in 2016. The banking institution said that the currently slow growth of China would affect demand in Asian economies. It is expected to be the world's second largest economy to grow by 6.8% by the end of the year, which is below their own government's forecast of 7%.

In 2014, China's economy grew by 7.3%. ADB, however, expects its growth to slow even more in 2016 to 6.7%. All of these statistics are published in their official website.

Earlier this month, the International Monetary Fund revealed that slower Chinese growth would cause a threat to the global economy, being possible that it would reduce demand for commodities from economies of other countries. For the first time the US Federal Reserve held off raising interest rates after nearly a decade last week, partly due to concerns over the impact of the slowdown in China.

Meanwhile, BBC also reported that ADB highlighted the slowing growth in India as well - another Asian powerhouse - and would impact heavily on the said region.

From an earlier forecast of 7.8%, the bank now expects the economic growth in India to slip to 7.4% by the end of the year due to its weaker external demand and slower reforms which keep on "holding back" India's own economic growth. Reports also revealed that monetary policy authorities in Asia will need to find a balance between stabilizing the financial sector and stimulating domestic demand, in order to "counter the impact of rates rise in the US."

Several times this year, policymakers in both China and India have cut interest rates in an attempt to boost lending and lift consumer demand. This is just one of their many counter measures, which are still unsure if will be continue before 2015 ends.