ADO Update 2012: Growth Outlook

ADO Update 2012 Growth Outlook ADB Asian Development Bank FIGHTING POVERTY IN ASIA AND THE PACIFIC FACEBOOK.COM/ASIANDEVBANK Developing Asia's growth is slowing faster than anticipated in the Asian Development Outlook 2012. Deceleration in the region's two giants - the People's Republic of China (PRC) and India - and major exporting economies is tempering earlier optimism. Poor global growth prospects and soft domestic demand in the region's two largest economies are slowing the pace of developing Asia's expansion. The possibility of a shock emanating from the unresolved euro area sovereign debt crisis or a sharp fiscal contraction in the United States pose the biggest downside risks to the economy. Developing Asia 7.2% 6.1% 6.7% 2011 2012 2013 PRC India Slowing investment and stagnating consumption are holding back GDP expansion in the PRC, with knock on effects for East Asia's outlook through diminished demand for intraregional exports. Tepid consumption was insufficient to make up for declining investment and export demand. À large fiscal deficit and persistently high inflation rates have limited the scope for fiscal and monetary policy to stimulate the economy. 9.3% 7.7% 8.1% 6.5% 5.6% 6.7% 2011 2012 2013 2011 2012 2013 Inflation Intemational food and fuel prices have been quite volatile in the first half of 2012. However, the surge in food and oil prices in the second half of 2012 - raising the specter of the 2008 price spikes - is a good concern. 5.9% 4.2% 4.2% %24 2011 2012 2013 ADO Update 2012 Growth Outlook ADB Asian Development Bank FIGHTING POVERTY IN ASIA AND THE PACIFIC FACEBOOK.COM/ASIANDEVBANK Developing Asia's growth is slowing faster than anticipated in the Asian Development Outlook 2012. Deceleration in the region's two giants - the People's Republic of China (PRC) and India - and major exporting economies is tempering earlier optimism. Poor global growth prospects and soft domestic demand in the region's two largest economies are slowing the pace of developing Asia's expansion. The possibility of a shock emanating from the unresolved euro area sovereign debt crisis or a sharp fiscal contraction in the United States pose the biggest downside risks to the economy. Developing Asia 7.2% 6.1% 6.7% 2011 2012 2013 PRC India Slowing investment and stagnating consumption are holding back GDP expansion in the PRC, with knock on effects for East Asia's outlook through diminished demand for intraregional exports. Tepid consumption was insufficient to make up for declining investment and export demand. À large fiscal deficit and persistently high inflation rates have limited the scope for fiscal and monetary policy to stimulate the economy. 9.3% 7.7% 8.1% 6.5% 5.6% 6.7% 2011 2012 2013 2011 2012 2013 Inflation Intemational food and fuel prices have been quite volatile in the first half of 2012. However, the surge in food and oil prices in the second half of 2012 - raising the specter of the 2008 price spikes - is a good concern. 5.9% 4.2% 4.2% %24 2011 2012 2013