Strong domestic demand, supported by 'healthy' remittance inflows, may lead to an 'upside surprise' in Bangladesh (economy) in the current fiscal year, ending on June 30, 2015, said the Asian Development Bank (ADB) in a new report.
The Asian Development Bank (ADB) slightly trimmed its growth forecast for developing Asia for this year and next, but said sliding prices for oil should help economies in the region push through with growth reforms, according to an ADB report.
In a supplement to its Asian Development Outlook 2014 Update, the Manila-based multilateral lender said Wednesday the developing Asia was now expected to grow 6.1 percent this year, a tad below its 6.2 per cent forecast in September. Growth in 2015 was seen at 6.2 per cent, from 6.4 per cent previously.
"While growth in the first three quarters of this year was somewhat softer than we had expected, declining oil prices may mean an upside surprise in 2015 as most economies are oil importers," said ADB Chief Economist Shang-Jin Wei.
India is on track to reach the update growth forecast of 5.5 per cent in FY2014 (ending Mar. 31, 2015) after expanding by 5.7 per cent in the first quarter and 5.3 per cent in the second quarter, said Asian Development Bank (ADB) in its report.
By eliminating diesel fuel subsidies, the government has demonstrated its willingness to tackle contentious reforms, but it must extend its efforts to reach the forecast 6.3% growth in FY2015. Somewhat stronger-than-expected performance in Maldives and Sri Lanka in 2014 is balanced by softness in Afghanistan and Bhutan.
The ADB cut its 2014 and 2015 growth forecasts for China to 7.4 per cent and 7.2 per cent, respectively, from the 7.5 per cent and 7.4 per cent estimates made in September, due to falling property prices and the spillover effects on the construction sector.
Southeast Asia is expected to grow slower than previously thought in 2014 and 2015 due to a slackening in economies in the region. The region is seen growing at 4.4 percent in 2014, down from a previous estimate of 4.6 per cent, and 5.1 per cent in 2015 instead of 5.3 percent.
"Falling global oil prices present a golden opportunity for importers like Indonesia and India to reform their costly fuel subsidy programs," Wei said. "On the other hand, oil exporters can seize the opportunity to develop their manufacturing sectors as low commodity prices tend to make their real exchange rates more competitive."
Since June, Brent crude LCOc1 has fallen 49 per cent to below $60 a barrel, which means big savings for Southeast Asia's large oil-importing economies - Thailand, Philippines and Indonesia.
Inflation in the region in 2014 is now forecast to be lower at 3.2 per cent in 2014 and 3.5 per cent in 2015, compared to the 3.4 per cent and 3.7 per cent seen in September.
