MANILA, July 20 (Xinhua) -- The Asian Development Bank (ADB) predicted developing Asia's economy to expand somewhat faster this year, projecting a 5.9-percent growth for 2017 mainly due to a stronger-than-expected export demand in the first quarter of 2017, a new ADB report released on Thursday said.
In a supplement to its Asian Development Outlook 2017 report released in April, the ADB upgraded its growth outlook in the region from 5.7 percent to 5.9 percent in 2017 and from 5.7 percent to 5.8 percent for 2018.
"The smaller upgrade in the 2018 growth forecast reflects a cautious view on the pace of the turnaround in external demand," the report says.
"Developing Asia is off to a good start this year with improved exports pushing growth prospects for the rest of 2017," said Yasuyuki Sawada, ADB's chief economist.
Despite lingering uncertainties surrounding the strength of the global recovery, Sawada said, "We feel that the region's economies are well-placed to face potential shocks to the outlook."
Combined growth for the major industrial economies is forecast to remain at 1.9 percent in 2017 and 2018, the report says.
It says that improved forecasts for the euro area and Japan due to robust domestic demand have offset the slight growth downturn in the United States to 2.2 percent from the previously projected 2.4 percent as a result of disappointing first quarter results in 2017.
By subregion, the supplement report raises East Asia's growth projections from 5.8 percent to 6 percent for 2017 and from 5.6 percent to 5.7 percent for 2018.
After recent growth moderation, the report says an increase in net exports and domestic consumption has improved growth prospects in China, the world's second largest economy, which is now expected to expand by 6.7 percent in 2017 and 6.4 percent in 2018.
The report says South Asia will remain the fastest growing of all subregions in Asia and the Pacific, with growth on track to meet original projections of 7.0 percent in 2017 and 7.2 percent in 2018. India, the subregion's largest economy, is expected to achieve previous growth projections 7.4 percent in 2017 and 7.6 percent in 2018, primarily from strong consumption, the report says.
Growth projections for Southeast Asia are expected to remain at 4.8 percent in 2017 and 5.0 percent in 2018, with accelerating growth for Malaysia, the Philippines, and Singapore, although this trend is slightly dampened by the slower-than-anticipated expansion in Brunei. Robust domestic demand, particularly private consumption and investment, will continue to support growth in the subregion, according to the report.
The outlook for Central Asia this year has also improved as stronger domestic demand and exports in some countries have fueled an unexpected recovery in the subregion. Growth is expected to reach 3.2 percent in 2017 and 3.8 percent in 2018 compared to the 3.1 percent and 3.5 percent original projections, respectively.
The report says growth in the Pacific is also expected to remain at 2.9 percent in 2017 and 3.3 percent in 2018 with Papua New Guinea, the subregion's largest economy, continuing its gradual recovery due to rebounding mining and agriculture industries. Stronger tourism prospects are also expected to drive growth further in the subregion, particularly in Fiji and Palau.
Meanwhile, the report says consumer price inflation in the region is projected to be lower from the previous estimate on the back of steady international oil and food prices despite increasing demand due to enough supplies and favorable weather conditions.
"Price inflation is now expected to drop to 2.6 percent in 2017, revised down by 0.4 percentage points, and 3.0 percent in 2018 compared to the original projections of 3.0 percent and 3.2 percent, respectively," the report says.