HONG KONG (AP) — Developing Asian economies will expand at a slightly faster pace this year than earlier forecast, but trade tensions with the U.S. pose a major risk, the Asian Development Bank said Wednesday in its latest regional update.
The Manila, Philippines-based lender said it expects the region to expand at a 6 percent clip in 2018, slightly above its previous forecast, after recording 6.1 percent growth last year.
For 2019, it predicts growth will ease to 5.9 percent.
The bank said robust exports and strong domestic consumer demand are supporting activity across the 45 economies it covers in its annual report.
Risks to the growth outlook are driven mainly by “fears of escalating trade tensions,” it said, referring to China-U.S. trade tensions that have threatened to escalate into an all-out trade war.
The report did not mention President Donald Trump but it was clearly referring to his trade policies, which have involved threatening China with higher tariffs on tens of billions of dollars of exports in a dispute that centers on complaints from foreign companies that say they’re forced to hand over their technology. Beijing has responded with its own proposed list of tariffs of a similar amount.
“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,” the report said.
Growth in China’s economy, the world’s second biggest, is set to cool to 6.6 percent in 2018 and 6.4 percent in 2019 after logging 6.9 percent growth last year, it said.