KUALA LUMPUR (July 17): The Asian Development Bank (ADB) has revised its growth projection for developing Asia upwards to 5% in 2024, a tad higher than the 4.9% forecast in April.

The bank in its Asia Development Outlook for July 2024 released on Wednesday said growth in developing Asia accelerated in the first quarter of 2024 (1Q2024), on resilient domestic demand and strong export growth, particularly in electronics.

The bank maintained its growth forecast for the region at 4.9% in 2025.

The ADB said headline inflation in developing Asia is now forecast to ease further from 3.3% last year to 2.9% this year, stabilising at 3.0% in 2025.

As for Malaysia, the ADB maintained its forecasts of a 4.5% growth in 2024, and 4.6% in 2025.

The bank said the gross domestic product (GDP) growth outlook for Malaysia for 2024 and 2025 remains with quarterly GDP growth expected to pick up in the coming quarters.

It added that Malaysia’s GDP grew by 4.2% in 1Q2024, supported by strong private consumption (up 4.7%), and continued improvements in employment and wages.

It said investment posted strong growth, underpinned by solid infrastructure investment (11.9%), and spending on machinery and equipment (8.9%).

Tourism arrivals continued to bounce back (32%), along with growth in accommodation, transport, real estate, and construction.

Manufactured exports posted a modest recovery (2.4%), supported by strong export growth from liquefied natural gas (4.2%) and crude petroleum products.

For the Southeast Asian region, the ADB forecast growth of 4.6% in 2024, and 4.7% in 2025.

The ADB said interest rates in the US and other advanced economies continue to shape the outlook, which is subject to several downside risks.

It said the uncertainty of the US election outcome, elevated geopolitical tensions and trade fragmentation, property market fragility in China, and weather-related events could hurt growth.

Meanwhile, La Niña is an upside risk, due to expected higher rainfall and cooler temperatures, the ADB said.