The Asian Development Bank expects regional economies to remain robust in relative terms, though momentum is bogged down by India. Photo by Str/EPA
MANILA, Dec. 13 (UPI) -- Growth for energy-hungry Asian economies is starting to level off as a slowdown in India drags on regional momentum, a regional lender said.
The Asian Development Bank trimmed its outlook for full-year 2016 from 5.7 percent to 5.6 percent for all of Asia. The forecast for 2017 remains stable at 5.7 percent. The bank said a slowdown in India was behind most of the downgrade.
"India's tempered growth projection to 7 percent from the previously forecasted 7.4 percent in 2016 is due to weak investments, a slowdown in the country's agriculture sector, and the lack of available cash due to the government's decision to ban high-denomination banknotes," the ADB said in report.
According to the economists working for the Organization of Petroleum Exporting Countries, India faces additional downside risks because of economic pressures at some of its key trading partners. Nevertheless, demand for oil from India is expected to increase modestly. OPEC said it expects India to take an average 4.3 million barrels per day this year and 4.5 million bpd in 2017.
India is short on paper money following a Nov. 9 ban on large-denomination notes.
The ADB said it expected the Chinese economy would grow at a rate of 6.6 percent this year, strong, but slower than in previous years. The regional lender said it expected the Chinese economy would slow to 6.4 percent next year, a forecast unchanged from its previous estimate.
OPEC said it expects China to take in an average 11.2 million bpd this year and 11.5 million bpd in 2017.
Juzhong Zhuang, a chief economist at the ADB, said the region in general was expected to remain robust when compared with peer economies.
"Asian economies continue their robust expansion in the face of global economic uncertainties," he said in a statement.
A report from the International Agency this week said that regional demand growth should translate into a greater appetite for cheaper coal. According to a mid-term report for coal, the IEA said the share of coal as a power source should drop from 41 percent in 2014 to 36 percent by 2021.
Coal demand, however, shifts to Asia as emerging economies with growing populations need affordable sources of energy.