Asia-Pacific economies predicted to grow 4.9pc in 2024, ADB reports

Developing economies in Asia and the Pacific are projected to grow by 4.9% this year, driven by strong domestic demand, improved semiconductor exports, and a resurgence in tourism, as per the Asian Development Bank's (ADB) Asian Development Outlook (ADO) report for April 2024.

The region is expected to maintain this growth rate into the next year, with inflation forecast to moderate following two years of heightened food prices.

Notably, the growth is predominantly supported by the economic activity in South and Southeast Asia, which compensates for the economic slowdown in China.

This slowdown is attributed to ongoing issues in the property market and reduced consumer spending.

In contrast, India is poised to sustain robust growth rates of 7.0% in 2024 and 7.2% in 2025.

China's economic growth, however, is expected to decelerate to 4.8% in 2024 and further to 4.5% in 2025, a drop from the 5.2% growth observed last year.

ADB Chief Economist Albert Park highlighted the region's overall strong and stable growth outlook, boosted by recovering consumer confidence and resilient investment.

He also noted a positive shift in external demand, especially for semiconductors.

The ADB cautions that policymakers should remain alert to potential risks such as supply chain disruptions, uncertainties in U.S. monetary policy, extreme weather events, and further declines in China’s property market.

Inflation across the region is expected to reduce to 3.2% this year and 3% next year, although it remains elevated compared to pre-pandemic levels outside of China.

The report also addresses the high rice prices, exacerbated by crop losses, India's export restrictions, and increased global shipping costs due to geopolitical tensions and environmental factors.

To manage this, the ADB suggests targeted subsidies, improved market monitoring, and strategic rice reserves.

Additionally, enhancing agricultural productivity through sustainable practices and technological investments is recommended for long-term stability.

Furthermore, regional cooperation is advocated to effectively manage rice prices and mitigate their impact on food security.