Inflation is expected to continue falling, approaching pre-pandemic levels as fuel and food prices decline, according to the
Asian Development Outlook (ADO) July 2023. Inflation in developing Asia is forecast at 3.6% this year, compared with an April forecast of 4.2%.
The reopening of the People’s Republic of China (PRC) is bolstering the region’s growth. The PRC’s economy is projected to expand 5.0% this year, unchanged from the April forecast, amid strong domestic demand in the services sector.
However, demand for developing Asia’s exports of electronics and other manufactured goods is slowing, as monetary tightening drags on economic activity in major advanced economies. The region’s growth forecast for next year is marginally revised down to 4.7% from a 4.8% estimate in April.
“Asia and the Pacific continues to recover from the pandemic at a steady pace,” said ADB Chief Economist Albert Park. “Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism."
