"Developing Asia" to grow 5.2% in 2022 but Ukraine war looms, ADB says

© Kyodo News

The Asian Development Bank said Wednesday that developing and newly industrialized Asian economies will grow 5.2 percent in 2022 as they continue to recover from the coronavirus pandemic, but warned of fallout from Russia's invasion of Ukraine.

In its Asian Development Outlook 2022 report, the Manila-based multilateral bank said growth in "developing Asia" -- a grouping of 45 economies excluding Japan, Australia and New Zealand -- is expected to remain strong and reach 5.3 percent in 2023, supported by a robust recovery in domestic demand and solid exports.

In 2021, developing Asia saw growth of 6.9 percent as it bounced back from a 0.8 percent contraction the previous year caused by the outbreak of the COVID-19 pandemic.

ADB Chief Economist Albert Park said the Ukraine crisis "has led to a spike in uncertainty, disruptions to global trade and soaring prices for commodities like energy and food" and urged developing economies in Asia to "monitor the fallout from the war and consider policies that might soften its impact."

The ADB also said in its report the U.S. Federal Reserve's monetary policy tightening, possible emergence of more lethal COVID-19 variants and disruptions associated with China's current Omicron strain outbreaks pose risks to the region's economic outlook.

The regional inflation rate is forecast to rise to 3.7 percent in 2022, before moderating to 3.1 percent in 2023, according to the report.

China, the region's largest economy, is expected to grow 5.0 percent this year and 4.8 percent next year amid continued export strength, while India, the second-largest, is forecast to expand 7.5 percent in 2022 and 8.0 percent in 2023.

Myanmar, which logged an 18.4 percent contraction in 2021 following the military coup, is expected to see a further 0.3 percent pullback this year with an exodus of foreign companies from the Southeast Asian country amid worsening business conditions.