India's slowdown hits Asia as ADB cuts entire region's growth forecasts
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The Asian Development Bank (ADB) today cut its economic growth forecasts for the region, which has been dragged back by a continued slowdown in India despite positive data out of powerhouse China.
The ADB lowered its 2012 growth forecast for developing Asia, which comprises 45 nations, marginally from 6.1 percent to 6.0 percent. It also revised downward the 6.7 percent growth outlook for 2013 to 6.6 percent.
It is the second time the bank has slashed growth estimates for the region, after cutting April's forecast of 6.9 percent growth in 2012 to 6.1 percent in October – the lowest rate since 2009 when the economy expanded by six percent.
It said the adjustment was made following mixed third quarter data in which "positive events" were slightly outweighed by sluggish figures elsewhere.
"Recent downside developments are expected to pare 0.1 percentage points from developing Asia's growth both this year and next," the Manila-based lender said in a statement.
"Slower-than-expected growth for India, the newly-industrialising economies and the two largest Central Asian economies slightly outweighs the more rapid expansion in some major Southeast Asian economies," the ADB said.
ADB's growth forecast for China this year remained at 7.7 percent, while India's estimated rate fell from 5.6 percent to 5.4 percent for the 2012 fiscal year.
Data last week showed India's economic growth for the July-September quarter eased to 5.3 percent, extending a slowdown since the start of the year, although analysts said a modest recovery was looming.
The once-booming Indian economy has slowed sharply due to high interest rates, Europe's debt crisis and sluggish investment caused by domestic and overseas concerns about policy-making and corruption.
A slew of recent Chinese data meanwhile suggests recovery may be around the corner, with official figures released Saturday showing that manufacturing activity in the world's second-largest economy grew in November for the second consecutive month.
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