Robust consumption to help maintain Indonesia's growth in 2019, 2020: ADB

ADB sharply cuts India's GDP growth forecast to 6.5% for FY20

China's economy will probably grow 6.2% this year, the ADB said, weaker than its 6.3% projection in July.

Weaker investment prior to the April-May general elections as well as tighter credit is weighing on India's growth outlook this year, with gross domestic product (GDP) now expected to expand 6.5 per cent in 2019 before ticking up to 7.2 per cent growth in 2020.

Revising its economic outlook for Indonesia, ADB estimated that the country would see moderate growth of 5.1 percent and 5.2 percent in 2019 and 2020 respectively.

Earlier, Finance Secretary Carlos G. Dominguez III expressed optimism that the local economy could hit at least the low-end of the government's target for the year in the second semester following the "not an unexpected" growth registered in April to June.

Meanwhile, it says that Papua New Guinea's recovery from an natural disaster is helping to boost growth in the Pacific subregion to 4.2 percent this year before moderating to 2.6 percent next year.

The report said that "p$3 ublic and private investment should regain traction as new, larger infrastructure projects get under way", noting that "t$3 he government is mobilizing more revenue to support public investment, while at the same time keeping he fiscal deficit within its fiscal program... equal 3.2% of GDP". While retaining the growth outlook for Vietnam for this year and the next, the report also highlighted significant risks to the forecast. With further narrowing of the trade deficit and a continued positive trend in workers' remittances, the current account deficit is projected to narrow further to 2.8pc of GDP in the ongoing fiscal year. Foreign direct investment is following a similar pattern.

"Despite currency depreciation in real effective terms, merchandise exports declined by 2.2 percent, partly because low cotton production constrained textile exports", ADB said.

"The People's Republic of China-U.S. trade conflict could well persist into 2020, while major global economies may struggle even more than we now anticipate", Yasuyuki Sawada, ADB's chief economist, said in a statement.

ABD further said notable challenges in FY2019 included 24 percent depreciation of rupee against the United States dollar as the authorities moved toward the adoption of a flexible exchange rate determined by the market, after having defended an overvalued rupee in recent years.

Semiconductor sales are expected to fall by more than 13 percent this year from last year, the report cites the World Semiconductor Trade Statistics group as saying. Inflation trended substantially higher to 7.3 percent in FY2019 from an average of 3.9 percent in FY2018, mainly reflecting currency depreciation and a considerable increase in domestic fuel prices.



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