ADB forecasts India to lead economic growth as China and SE Asia slip

Indian shoppersADB forecasts: Brisk consumer spending and the growth of its rural economy will help the Indian economy outperform its Asia Pacific neighbours this year, the ADB predicted today. The bank expects South Asia to be the fastest growing sub-region, with India likely to meet its 2016 projected growth targets of 7.4% and 7.8% for 2016 and 2017 respectively. In contrast, it cut its 2016 growth projections for developing economies in Asia and the Pacific from 5.7% to 5.6%, but added that the economies’ performance would remain solid and help offset softness from the US economy and near-term market shocks from Britain’s vote to exit from the European Union.
ADB chief economist Shang-Jin Wei“Although the Brexit vote has affected developing Asia’s currency and stock markets, its impact on the real economy in the short term is expected to be small,” said Shang-Jin Wei, the ADB’s chief economist. “However, in light of the tepid growth prospects in the major industrial economies, policy makers should remain vigilant and be prepared to respond to external shocks to ensure growth in the region remains robust.”
China, the world’s second-biggest economy, is on track to meet earlier growth projections for 2016 and 2017 of 6.5% and 6.3% respectively, with the government expected to continue fiscal and monetary stimulus measures to support its targets. Its growth projections for 2016 and 2017 remain unchanged at 4.5% and 4.8%.