Asian Development Outlook (ADO) 2016 Update

Growth has held up in developing Asia despite a difficult external environment. The region is expected to grow steadily at 5.7% in 2016 and 2017, the forecasts in this Update unchanged from Asian Development Outlook 2016. While global commodity prices have begun to rebound, inflation remains largely subdued. Consumer prices will likely rise by 2.6% in 2016 and 2.9% in 2017. Continued slow recovery in the United States, the euro area, and Japan presents a clear downside risk to the outlook. Uncertainty about the path of monetary policy in these economies, and the implications this has for capital flows, complicates macroeconomic management in developing Asia. Policy makers globally need to resist moves toward protectionism that would only undermine the recovery. By transitioning to low-carbon growth, developing Asia is poised to reap outsized rewards as an essential player in the global effort to contain climate change.