ADB Lowers Asian Economic Outlook Asia

TEMPO.CO, Jakarta - The Asian Development Bank negatively revised their economic growth forecast in Indonesia to 4.9% in 2015, anticipating delays in the recovery of developed countries and China's economic slowdown.

The ADB said Asia is facing significant impediment in their economic growth. The Bank revised the developing economies growth forecast to 5.8% by 2015 and 6% in 2016, from previously 6.3% for both.

Reason for the revision is economic recovery in developed countries are slower than expected. Growth in the US was hampered by winter and labor conflicts, while the Europe economy is facing Greece’ debt crisis.

Delayed recovery in developed countries then impacted on the pace of the Chinese economy. Exports and investments declined sharply putting the brakes on China's GDP growth. Predicted China's growth fell from 7.3% in 2014 to 6.8% in 2015 and then to 6.7% in 2016.

Both of these developments make economies in Southeast Asia increasingly depressed. Five of ASEAN's largest economy is predicted to grow only 4.8% in 2015 and 5.3% in 2016.

One of the most drastic revisions given was to the Indonesian economy. Indonesian economic growth 2015 is forecast down from 5.5% to 4.9%, while GDP growth was projected down from 6% to 5.4%.

Economic factors that hinder Indonesia among others is delayed infrastructure spending, the impact of the exchange rate due to the high portion of foreign debt in foreign currency, and higher than expected inflation.

BISNIS.COM