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The Asian Development Bank said that despite the slowdown, China will remain the world economy's biggest growth engine.
“It's clear that China will continue to be important for some time to come,” Albert Park, chief economist at ADB, said at a press conference for the Asian Development Bank's Asian Development Outlook report. It accounts for half of the total,” he said.
“Growth is moderating and we expect it to continue to be moderate over the next few years…but growth is likely to be the biggest contributor to global growth in the global economy,” Park said. .
ADB forecasts that China's annual GDP growth rate in 2024 will be 4.8%, lower than the government's target of “around 5%.” China's economy expanded by 5.2% in 2023, matching the official target of around 5%.
Even if growth slows, ADB data estimates that China will account for 46% of developing Asia's growth from 2024 to 2025.
Based on purchasing power parity exchange rates used by the ADB, World Bank, and International Monetary Fund, China currently accounts for 18% and 48% of global and Asian GDP, respectively.
India's stellar economic trajectory has led many to tout the country's role as a technology and manufacturing powerhouse and an attractive alternative to China. The South Asian country's economy recently expanded at the fastest pace in six quarters, beating expectations by growing 8.4% in the October-December period of the current fiscal year 2023-24.
“India's importance to regional growth is increasing,” Park told CNBC via email. ADB projects the country's growth rate to be 7% in 2024 and 7.2% in 2025, making it the highest growth rate in the region.
There is no doubt that India's economy is a “bright spot”, but it is still small compared to China's economy, Park said. The economist pointed out that China's economy remains about 2.5 times larger than India's in terms of PPP exchange rate indicators.
“So based on that metric, I think it will take a long time for India to really drive global growth,” he added.
Additionally, growth in developed countries is expected to slow this year, with ADB forecasting US GDP growth in 2023 to fall to 1.9% from 2.5% last year, and Japan's growth rate to 0.6% from 1.9%. are doing.
The bank also said in its report that it expects growth in developing Asia to be slightly stronger this year than expected in December, as healthy domestic demand offsets a slowdown in China.
Despite rising energy prices, inflation is also expected to slow in the Asia-Pacific region from 3.3% in 2023 to 3.2% this year.