ISLAMABAD: The Asian Development Bank (ADB) on Thursday said the economic outlook for South Asia remains strong, with growth on track to meet the projections of 6.9 per cent in 2015 and 7.3pc in 2016, while the forecast for economic growth in Pakistan remains at 4.2pc in 2015 and 4.5pc in 2016.

In a supplement to the Asian Development Outlook Update report of September 2015, ADB maintained growth projections for the region, with a slight upgrade of growth forecasts for China offset by downward revisions to the forecasts for Central Asia and the Pacific. The growth outlook for the major industrial economies has also been downgraded.

Overall, Asia’s developing economies remain on track to post growth of 5.8pc in 2015 and 6pc in 2016, as the region’s economies remain resilient to continued economic weakness in industrialized countries, says a new ADB report.

The continued softness in international commodity prices will keep inflation low. The inflation forecast for 2015 is maintained at 2.3pc but trimmed to 2.7pc for 2016.

Food prices registered decline of 15.3pc in the first ten months of 2015. All sub-indexes recorded declines — in double digits for edible oils at 22pc and grains at 14pc. The latest forecasts from the November 2015 report of the US Department of Agriculture suggest that supplies of major agricultural commodities will remain ample.

In view of well-supplied markets for most grains, oilseeds, and edible oils, the food commodity price index is expected to average 13pc lower in 2015 than in 2014 and to decline further by one per cent in 2016.

Recent evidence suggests that the current El Niño could be one of the strongest on record but, because of the ample supplies of major agricultural commodities, is unlikely to cause a spike in global agricultural prices.

The inflation forecast for developing Asia is maintained at 2.3pc in 2015. With sustained low commodity prices and a delayed pickup in global demand, the 2016 inflation forecast is revised down to 2.7pc from 3pc in the report. In South Asia, inflation at 4.9pc forecast for 2015 is slightly lower than the 5pc projection in the report.

The growth outlook for the major industrial economies — the US, eurozone, and Japan — has been revised slightly down from the September Update, as the pace of recovery in the US has been slower-than-expected and Japan’s economy has contracted for two consecutive quarters.

Although recovery continued in the euro area, risks remain firmly on the downside. Together, the major industrial economies are projected to expand by 1.8pc in 2015 and 2pc in 2016.

Published in Dawn, December 4th, 2015