"However, inflation has picked up since July 2017 on a price uptick for food, especially pulses and vegetables".
For the 45 economies in Asia, the ADB upgraded its growth estimate to six percent from five-point-nine percent for this year, but maintained its previous outlook for next year at five-point-eight percent.
Combined growth for the major industrial economies was revised upward to 2.2 percent for 2017 and 2 percent for 2018, due to robust domestic demand in the euro area, and in Japan due to private investment and net exports. Manila-based lender, in its ADO update in September, said the acceleration in GDP stemmed from growth in services and industry driven by infrastructure investment and development expenditure.
Growth for Southeast Asia was revised up from its earlier forecast with GDP set to expand by 5.2 percent in 2017 and 2018, compared to September 2017 forecasts of 5 percent and 5.1 percent.
The Asian Development Bank (ADB) raised its forecast for the Philippines's GDP expansion this year to 6.7 percent, although Socioeconomic Planning Secretary Ernesto M. Pernia said this is just "the minimum" growth the government is now expecting given the economy's performance thus far.
"The subregion is benefiting from stronger investment and exports, with accelerating growth for Brunei, Malaysia, the Philippines, Singapore and Thailand", ADB said.
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India is seen expanding by 7.3% next year, slightly lower than initially forecast, as higher crude oil prices could add fiscal pressures to the region's second-largest economy and investment growth is expected to remain soft, the report said.
"South Asia will remain the fastest growing of all sub-regions in Asia and the Pacific, despite a downward revision from previous projections from 6.7 percent to 6.5 percent in 2017, and is expected to pick up to 7 percent in 2018", ADB said. "However, a continued expansion in external demand will generate positive spillovers to the domestic economy through the income and investment channels". The projection for 2018 was kept unchanged at 5.8%.
The forecast is based on the assumption that the global economy will continue to recover, led by the US. Growth is expected to reach 3.6% in 2017 compared to the 3.3% originally projected.
She said export growth is expected to boost employment and wages for three sectors: manufacturing, agriculture and tourism. "Fuel prices also inched up in response to rising global crude oil prices", it said.
Further, the ADB said rising commodity prices have not yet driven inflation across the region, with consumer price inflation tame and stable.
Thailand's policy rate is unlikely to rise because inflation is projected to be below 1.2%, while a higher USA yield will result in a narrower interest gap between Thailand and the U.S., she said.