Weak external demand continued to put pressure on manufacturing and industrial production, while domestic conditions are expected to improve moving forward, the bank said.
The country's inflation is forecast to slow to 4% in 2023 and the next year.
Meanwhile, the Asia Pacific region is expected to maintain growth of 4.8% this year, driven by domestic demand.
Inflation is expected to continue falling, approaching pre-pandemic levels as fuel and food prices decline, according to the ADO.
Inflation in developing Asia is forecast at 3.6% this year, compared with an April forecast of 4.2%.
The reopening of China is bolstering the region’s growth. However, demand for developing Asia’s exports of electronics and other manufactured goods is slowing, as monetary tightening drags on economic activity in major advanced economies. Thus, the region’s growth forecast for next year is revised down to 4.7% from a 4.8% estimate in April.
Asia and the Pacific continue to recover from the pandemic at a steady pace, said ADB Chief Economist Albert Park.
Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism, he went on.
The ADB maintains its growth forecasts for most subregions in Asia and the Pacific with Southeast Asia, Caucasus and Central Asia are exceptions.
Notably, growth in Southeast Asia is now expected at 4.6% this year and 4.9% next year, down from 4.7% and 5% previously, due mainly to weak global demand for processed and manufactured industrial products, according to the ADO.
