In the smallest of nutshells, here’s the picture (below) that sums up the 258-page report released by the ADB Wednesday last week, an update to work published earlier in the year.
The elephant in the room is of course the trade dispute between America and China. Trade between the two countries is now conspicuously affected and this is having a knock-on throughout the region. China ships less goods to the U.S., trade with Japan (especially, but many others too) for key raw materials falls; and so on.
On top of the above there seems to be a problem in the electronic manufacturing complex which is also being felt throughout the region.
Unsurprisingly therefore GDP growth forecasts are cut. For the region forecast growth for 2019 is cut from 5.7 to 5.4%. For China the 2019 forecast goes from 6.3% to 6.2% and for 2020 it’s cut from 6.1% to 6%.
In fairness, Asian growth weakness isn’t all the direct result of American beastliness. The world’s major economies are synchronously slowing too.
As if the above weren’t bad enough the Bank also notes debt is back in the Asian risk-mix equation. Not the issue it was before the Asian financial crisis but showing some worrying trends nonetheless.
The report concludes things are mostly fine but risks are now skewed to the downside and the progress of debt accumulation requires closer monitoring.
You can access the ADB Report in Full via this link. Despite its length its an easy to read and informative piece.
Happy Sunday.