Economic growth in developing Asia "remains broadly stable," but a slight slowdown in India has trimmed down the region's growth outlook for 2016 from 5.7 percent to 5.6 percent, said an updated Asian Development Bank (ADB) report released on Tuesday.
In a supplement to its Asian Development Outlook 2016 Update report, the ADB says growth for 2017 remains unchanged at 5.7 percent.
"Asian economies continue their robust expansion in the face of global economic uncertainties," said ADB deputy chief economist Juzhong Zhuang. "Structural reforms to boost productivity, improve investment climate, and support domestic demand can help maintain growth momentum into the future."
The forecast in East Asia is maintained for 2016 and 2017, according to the report.
"Growth this year will reach 5.8 percent, with a slight moderation to 5.6 percent in 2017. Growth in China, the world's second largest economy, is expected to hit 6.6 percent this year, driven by strong domestic consumption, solid wage growth, urban job creation, and public infrastructure investment," the report said.
The bank's forecast for China in 2017 is maintained at 6.4 percent.
Combined growth for the major industrial economies exceeded expectations, the report says, ticking up 0.1 percentage point to 1.5 percent in 2016.
"Growth in 2017 is maintained at 1.8 percent. Robust consumer spending supported the U.S. economy, with supportive monetary policy and improved labor markets fueling growth in the euro area. Japan's expansion, meanwhile, will be buoyed by strong exports, despite the stronger local currency," the report said.
ADB has downgraded the forecast in South Asia from 6.9 percent to 6.6 percent in 2016. It predicts, however, that growth will bounce back in 2017, reaching 7.3 percent.
"India's tempered growth projection to 7.0 percent from the previously forecasted 7.4 percent in 2016 is due to weak investments, a slowdown in the country's agriculture sector, and the lack of available cash due to the government's decision to ban high-donimation banknotes," the report said.
"This will likely affect largely cash-based sectors in the country including small-and medium-scale businesses. The effects of the transition are expected to be short-lived and the Indian economy is expected to grow at 7.8 percent in 2017," it added.
In Southeast Asia, the report said growth forecasts remain unchanged at 4.5 percent in 2016 and 4.6 percent in 2017, with Malaysia and the Philippines expecting stronger growth due to a surge in domestic consumption and public and private investment, compared to lower growth forecasts in Brunei, Myanmar and Singapore.
The bank's outlook in Central Asia is maintained at 1.5 percent in 2016 and 2.6 percent in 2017, as the ongoing recession in Russia and low global commodity prices for oil and natural gas continue to dampen growth in the subregion.
The bank predicts the Pacific to grow 2.7 percent in 2016, picking up to 3.3. percent in 2017.
"The fiscal contraction in Papua New Guinea, the Pacific's largest economy, and recovery from recent cyclones have weighed on growth in the subregion. While cyclones damage in Fiji has had a bigger impact on its growth outlook than previously envisaged, prospects for Samoa, Kiribati and Tuvalu are improving through improvements in fisheries, infrastructure and tourism," the report said.
