Asian Development Outlook 2013 Update: Growth Outlook

ASIAN DEVELOPMENT OUTLOOK (ADO) 2013 UPDATE: GROWTH OUTLOOK ADB Asian Development Bank FIGHTING POVERTY IN ASIA AND THE PACIFIC wwW.ADB.ORG Developing Asia is challenged to sustain its growth momentum - the region's pace is expected to fall back marginally in 2013 before picking up in 2014. Faced with the twin challenge of maintaining financial stability and sustaining growth, the recent financial turmoil has all the more emphasized the need for structural reforms to support growth in the region. Despite improving growth prospects for the advanced economies, growth across developing Asia is somewhat held back by the moderation of growth in the two regional giants - the People's Republic of China (PRC) and India - and instability in financial markets buffeted by volatile capital flows. ADO 2013 forecast ADO 2013 Update forecast Developing Asia 6.6% 6.7% 6.1% 6.0% 6.2% 2012 2013 2014 PRC India The authorities seek to engineer a medium-term transition to a more sustainable growth path than one led by exports and investment. The shift is evident in recent efforts to tackle a burgeoning shadow banking system. Persistent supply-side bottlenecks such as poor infrastructure and long delays in structural reform keep industry and investment lagging. Fiscal and current account deficits also dent business confidence. 8.2% 8.0% 6.0% 6.5% 7.7% 7.6% 7.4% 5.0% 4.7% 5.7% 2012 2013 2014 2012 2013 2014 Inflation Inflation in developing Asia is projected to dip this year as weaker growth and tepid commodity prices keep price pressures in check. 4.0% 4.2% 3.7% 3.6% 3.7% 2$ 2012 2013 2014 %24