MANILA - The Asian Development Bank (ADB) on Friday trimmed the region's growth forecasts for 2012 and 2013 amid "uncertainty" in Europe and the United States, and a poor Indian economy.
The region of Developing Asia, which excludes Japan, was set for growth of 6.0% in 2012, and 6.6% in 2013, the bank's latest Asian Development Outlook Supplement said, 0.1 percentage point lower for each year than it predicted in October.
An Indian fishermen checks the fishing nets near the shore of the Arabian Sea in Mumbai, India, on June 26, 2012. (EPA photo)
The group of countries was dragged down by India's performance stressing the country's sliding industrial production and declining exports.
In the second quarter, Indian industrial production fell 0.4% and overall growth in gross domestic product (GDP) slid to 5.3% from 6.7% a year earlier, the report said.
Moreover, growth in consumer spending was one of the lowest in recent years, it said.
"With weak agricultural income keeping rural consumption low and fragile investment sentiment in the coming quarters, GDP growth is now projected at 5.4% for fiscal 2012," less than the 5.6% that was forecast in ADB's 2012 October update, the report said.
Southeast Asian consumers and "a mild economic recovery" in China provided some buoyancy to offset India's weakness, it said.
However, "enduring debt problems and economic weakness in Europe and the looming fiscal cliff in the United States remain very real threats to developing Asia next year," the bank's chief economist Changyong Rhee said.
In China, October's data reinforced September's indication of recovery, the report said, with "industrial production growth rebounding to a five-month high of 9.6% and fixed investment expanding 20.7%, backed by a 25.5% increase in infrastructure investment."
The country's retail sector also showed strength, growing 14.5%, spurred by increased car and appliance sales, it said.
The bank expects that fourth-quarter growth of around 7.7% year-on-year will be followed by a likely 8% annual growth in 2013's first quarter.
Better-than-expected performances from Malaysia and the Philippines in the third quarter boosted the 2012 growth forecast for the ASEAN-5 group, which also includes Vietnam, Indonesia and Thailand, from a collective 5.6% to 5.9%.
The ADB said it also expected the Thai economy's fourth quarter to show a strong rebound due to the "low base effect from the impact of last year’s floods."
Philippine growth for the quarter was 7.1% year-on-year, more than double the rate recorded in the same period a year earlier.
Singapore was lagging behind other countries in the region, with 0.3% year-on-year growth in the third quarter.
The report covered 44 developing ADB member countries and Brunei Darussalam, an unclassified regional member.