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Sep 24, 11:42 PM EDT

ADB cuts growth forecast for Southeast Asia this year and next due to slower domestic demand

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MANILA, Philippines (AP) -- The Asian Development Bank trimmed its economic growth forecast for Southeast Asia this year and next due to slower domestic demand in some of its bigger economies. Its forecasts for China, the world's second largest economy, were unchanged.

Southeast Asia's growth this year is now projected at 4.6 percent, down from an earlier forecast of 5.0 percent and actual growth of 5.0 percent in 2013, the development lender said Thursday.

Gross domestic product growth is expected to slow in Indonesia, the Philippines, Singapore, Thailand and Vietnam, but pick up in Malaysia where exports have rebounded.

Next year, better performance of major industrial economies and Thailand's recovery from its slump are forecast to spur Southeast Asian growth to 5.3 percent. ADB's earlier forecast was 5.4 percent.

The bank said 45 developing countries in Asia still comprise the world's fastest growing region and its stable growth masks shifting fortunes across subregions.

Growth forecasts for developing Asia as a whole were maintained at 6.2 percent this year and 6.4 percent next year, with upward adjustments in South Asia's growth counterbalanced by likely slowdowns in Central Asia and Southeast Asia. The region grew 6.1 percent in 2013.

China is still expected to grow 7.5 percent this year and 7.4 percent in 2015, as the bank projected in April.

"Slowing external demand has hurt some economies in the region but as a whole Asia and the Pacific is on track for firm growth in 2014 and 2015," said Shang-Jin Wei, ADB's chief economist.

The report said the world's major industrial economies which recorded virtually no growth in the first half of the year now forecast to expand 1.5 percent collectively this year, slightly down from the ABD's April forecast, before growth picks up to 2.1 percent in 2015.

India shows new promise of a turnaround with reforms expected to boost growth. The bank said it was maintaining its forecast of 5.5 percent growth for India this year, but is raising the forecast to 6.3 percent for next year from 6.0 percent.

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