MANILA - The Asian Development Bank forecast Wednesday that economic growth in developing and newly industrialized economies of Asia and the Pacific will remain solid in 2018 and 2019, albeit slightly lower than last year.
According to its latest annual Asian Development Outlook, gross domestic product in the region -- minus Japan, Australia and New Zealand -- is expected to grow 6.0 percent in 2018 and 5.9 percent in 2019, lower than the 6.1 percent recorded in 2017.
"Economies across developing Asia will maintain the current growth momentum driven by sound policies, expanding exports, and robust domestic demand," ADB Chief Economist Yasuyuki Sawada said in a statement, adding that strong regional trade links and rising financial buffers put the region in a position to weather external shocks.
The region's gross domestic product is the measure of its economic output.
Excluding the high-income, newly industrialized economies such as Hong Kong, Taiwan, China, Singapore and South Korea, the ADB said that growth will reach 6.5 percent and 6.4 percent for the two years respectively.
The ADB said that Southeast Asia's growth rate of 5.2 percent in 2017 is expected to be maintained for both years, with strong investment and domestic consumption driving acceleration in Indonesia, Philippines and Thailand.
In Central Asia, growth is expected to reach 4.0 percent in 2018 and 4.2 percent in 2019, driven mainly by rising commodity prices.
In the Pacific, growth is expected to reach 2.2 percent and 3.0 percent for the two years, with the expected recovery of the region's largest economy, Papua New Guinea, from a temporary disruption of its gas production due to an earthquake.
The ADB also warned of escalating trade tensions linking the United States and Asian economies posing potential risks to the economic growth in the region.
"Recent U.S. tariffs on select products have not yet dented trade, but further actions by the U.S. and counteractions against them could undermine business and consumer confidence in Asia and the Pacific," it said, adding that higher U.S. interest rates, which in turn could cause more capital outflow, are another potential risk.
Economic outlook for the region in the coming years is generally positive, with other forecasts on the developments during the period hovering well within ADB estimates.
The Mizuho Research Institute, in a report in February, said GDP for Asia, including China but not Japan, is expected at 6.2 percent and 6.0 percent in 2018 and 2019.
"We anticipate an overall waning of overall economic expansion, particularly exports. However consumption is firm in the ASEAN 5 on the back of favorable employment conditions," its report said, referring to Indonesia, Thailand, Malaysia, Philippines and Vietnam.
Euben Paracuelles, a senior economist at the BDO Nomura Securities Inc., told Kyodo News that the brokerage firm is slightly more optimistic with its forecast for the period, noting that the region's economic growth has been stable since last year.
"This reflects our view that while we expect China to post slower growth this year compared to 2017, we have other countries seeing an acceleration and providing an offset," Paracuelles said, citing Indonesia, India and the Philippines as among the "Asia's new tiger cubs" which are implementing structural reforms and attracting foreign direct investment inflows.