Buoyed by rising exports and impact of stimulus packages on Asian economies, the Asian Development Bank today raised the growth prospects for the region to 7.9 per cent, but retained the forecast for India at 8.2 per cent for 2010.
"Better-than-expected results in the first quarter, driven by buoyant exports, strong private demand, and sustained stimulus policy effects, are behind the revision," the Asian Development Bank (ADB) said while raising the growth projections for the region to 7.9 per cent, from 7.5 per cent it forecast in April.
ADB, which came out with a Special Note on economies, however, kept the projections for India and China unchanged 8.2 per cent and 9.6 per cent, respectively.
Earlier this month, the International Monetary Fund (IMF) had hiked the country's growth forecast for 2010 to 9.5 per cent from its April projection of 8.8 per cent.
Finance Minister Pranab Mukherjee, however, said yesterday that he would stick to his conservative outlook of about 8.5 per cent plus economic expansion for the current fiscal.
Meanwhile, despite upward growth revision for Asia, ADB warned of downside risks in the second half of 2010 on account of uncertain global environment, unpredictable private domestic demand, and the risks of dramatic capital flows and exchange rate fluctuations.
It kept Asia's growth outlook for 2011 unchanged at 7.3 per cent.
For 2010, ADB forecast East Asia, comprising China; Hong Kong; Republic of Korea; and Taipei, to expand 8.4 per cent, slightly higher than the 8.3 per cent predicted earlier.
It said that aggregate growth in Southeast Asia is now expected to be 6.7 per cent this year, sharply higher than the previous projection of 5.1 per cent.
"First-quarter growth in the five bigger economies in this region (Indonesia, Malaysia, Philippines, Singapore and Thailand) exceeded expectations on account of strong exports, robust industrial production, and improved consumer confidence. The subgroup is projected to post 6.8 per cent growth this year," ADB added.
In South Asia, recent economic indicators have been broadly within expectations. ADB forecast aggregate growth of 7.5 per cent, slightly higher than the April projection of 7.4 per cent. India's growth projection is unchanged at 8.2 per cent.
Improving global conditions as well as higher oil prices have helped the economies in Central Asia so far in 2010. ADB now sees the region's economy growing an aggregate 4.8 per cent, up slightly from earlier forecast of 4.7 per cent.
Growth in the Pacific island economies is now forecast at 3.8 per cent, against the earlier forecast of 3.7 per cent.
