The Asian Development Bank trimmed its growth outlook for developing Asia as it warned against a prolonged U.S.-China trade conflict that could spread across other economies.
Following 5.9% growth in 2018, developing Asia is projected to expand 5.4% in 2019 and 5.5% in the succeeding year, down 0.3 percentage points and 0.1 percentage point, respectively, from the bank's prior forecast. Developing Asia refers to 45 member economies of the development bank in Asia Pacific aside from Japan, Australia and New Zealand.
The ADB attributed the revisions to "gloomier prospects" for global trade, as well as signs of slowing growth in China, India and larger economies in East and Southeast Asia.
China's expansion rate is expected to ease to 6.2% this year and 6.0% in 2020 from 6.6% in 2018. The lender had previously projected China's growth rates would come in at 6.3% and 6.1% for 2019 and 2020, respectively.
In India, economic growth is forecast to slow to 6.5% this year from 6.8% in 2018, before accelerating to 7.2% next year. The ADB also slashed its growth outlook for Hong Kong amid protests in the semi-autonomous territory, which it now expects to grow only 0.3% this year, down from a prior estimate of a 2.5% expansion.
Excluding high-income newly industrialized economies, regional growth is expected to moderate to 6.0% this year and next from 6.4% in 2018.
The ADB expects the trade dispute between the U.S. and China to extend beyond this year, adding that the dispute could intensify further and spill over into other countries.
The lender also warned against mounting debt, which it said makes developing Asian economies more vulnerable to shocks.
