Like the the IMF and World Bank before them, Asia's Development Bank just slashed its economic growth forecasts

Photo: Scott Gries/Getty Images

Hot on the heels of global growth downgrades from the World Bank and IMF, the Asian Development Bank (ADB) has followed suit today, slicing its growth forecast for developing Asia for this year and next.

The ADB now sees growth of 6.1% for 2015, down 0.2% on the previous forecast offered in March, while that for 2016 was also lowered from 6.3% to 6.2%.

According to Shang-Jin Wei, chief economist of the Manila-based bank, slower-than-expected economic activity in the US and China are behind the lowering of growth expectations.

“Slower growth in China is likely to have a noticeable effect on the rest of Asia given its size and its close ‎links with other countries in the region through regional and global value chains. While weaker-than-expected external demand, a declining working age population, ‎and rising wages, have contributed to a slower rate of growth in the nation, reforms aimed at improving labor market flexibility and capital allocation to the most productive firms are needed as they can also help to raise the growth rate.

Ongoing softness in the major industrialized economies (US, Japan, Euro Area) will see a slowdown in East Asia as a whole, with growth now at 6.2% in 2015, down from 6.5% forecast earlier”.

The updated growth forecasts from the bank are highlighted below. They now expect growth in China, the largest economy in developing Asia, to grow 7% this year before slowing to 6.8% in 2016.

The supplementary outlook report from the ADB can be accessed here.

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