News: India,China to push Asia's eco growth to 7.7 %
(TNN 06/09/2006) Manila - China and India are expected to push developing Asia's economic growth to a better than expected 7.7 per cent this year despite high oil prices, said, the Asian Development Bank in a report.
The forecast is contained in an update of the Philippines-based lender's annual publication Asian Development Outlook, which projected 7.2 and 7.0 percent growth for the region in its earlier edition published on April 6.
The region's outlook "is supported by strong performances by (China) and India, since together these two economies account for over 50 percent of regional GDP (gross domestic product)," it said.
China's economy, which grew at 10.9 percent in the six months to June is now expected to grow by 10.4 per cent for the entire year and 9.5 percent in 2007, higher than the ADB's original forecasts of 9.5 per cent and 8.8 percent, respectively.
India's 2006 growth forecast was upgraded by 0.2 percentage points to 7.8 percent amid buoyant export growth, while the 2007 forecast of 7.8 percent was maintained. "The remaining economies of Asia are expected to grow by more modest averages" of 5.5 percent this year and 5.1 percent in 2007, it added.
The updated 2007 forecast "is predicated on generally favorable external conditions" while factoring in tighter global liquidity, softer growth in the industrial countries, and "oil prices staying high," the report said. However, it warned that if elevated terrorist threats persist over a prolonged period and disrupt international travel "this would clearly be a negative factor," especially on tourism-dependent countries like the Maldives and Thailand to a lesser extent.
The report said East Asia grew at a fast tempo and was expected to hit 8.2 per cent for the whole year, reflecting greater than expected strength of fixed investment and exports in China, which also lifted Hong Kong.
South Asia should grow by 7.5 per cent this year after averaging 7.7 per cent annually since 2002, outpacing Southeast Asia by about two percentage points and almost matching that of East Asia, it said. The bank slightly downgraded the 2006 growth forecast for Southeast Asia to 5.4 per cent form 5.5 per cent.
It cited political uncertainty and postponement of large infrastructure projects in Thailand, slowing domestic consumption in Malaysia, better farm output in the Philippines, and buoyant pharmaceutical and electronics activity in Singapore.
It said Central Asia should grow by 11.3 percent this year, one percentage point above the average for the past five years, lifted by oil-producing Azerbaijan and Kazakhstan, along with strong construction activity in Armenia. For the island economies of the Pacific, the oil price boost for Papua New Guinea should lift sub-regional growth to 3.3 percent this year, ADB said.
The bank said average inflation in the region should rise to 3.8 per cent this year from 3.4 per cent in 2005, though inflation pressures are ebbing in some countries while expectations are rising in others. "Monetary authorities continue to show vigilance and generally lean toward tightening. Policy rates have tracked up in many countries," it added.
The forecast is contained in an update of the Philippines-based lender's annual publication Asian Development Outlook, which projected 7.2 and 7.0 percent growth for the region in its earlier edition published on April 6.
The region's outlook "is supported by strong performances by (China) and India, since together these two economies account for over 50 percent of regional GDP (gross domestic product)," it said.
China's economy, which grew at 10.9 percent in the six months to June is now expected to grow by 10.4 per cent for the entire year and 9.5 percent in 2007, higher than the ADB's original forecasts of 9.5 per cent and 8.8 percent, respectively.
India's 2006 growth forecast was upgraded by 0.2 percentage points to 7.8 percent amid buoyant export growth, while the 2007 forecast of 7.8 percent was maintained. "The remaining economies of Asia are expected to grow by more modest averages" of 5.5 percent this year and 5.1 percent in 2007, it added.
The updated 2007 forecast "is predicated on generally favorable external conditions" while factoring in tighter global liquidity, softer growth in the industrial countries, and "oil prices staying high," the report said. However, it warned that if elevated terrorist threats persist over a prolonged period and disrupt international travel "this would clearly be a negative factor," especially on tourism-dependent countries like the Maldives and Thailand to a lesser extent.
The report said East Asia grew at a fast tempo and was expected to hit 8.2 per cent for the whole year, reflecting greater than expected strength of fixed investment and exports in China, which also lifted Hong Kong.
South Asia should grow by 7.5 per cent this year after averaging 7.7 per cent annually since 2002, outpacing Southeast Asia by about two percentage points and almost matching that of East Asia, it said. The bank slightly downgraded the 2006 growth forecast for Southeast Asia to 5.4 per cent form 5.5 per cent.
It cited political uncertainty and postponement of large infrastructure projects in Thailand, slowing domestic consumption in Malaysia, better farm output in the Philippines, and buoyant pharmaceutical and electronics activity in Singapore.
It said Central Asia should grow by 11.3 percent this year, one percentage point above the average for the past five years, lifted by oil-producing Azerbaijan and Kazakhstan, along with strong construction activity in Armenia. For the island economies of the Pacific, the oil price boost for Papua New Guinea should lift sub-regional growth to 3.3 percent this year, ADB said.
The bank said average inflation in the region should rise to 3.8 per cent this year from 3.4 per cent in 2005, though inflation pressures are ebbing in some countries while expectations are rising in others. "Monetary authorities continue to show vigilance and generally lean toward tightening. Policy rates have tracked up in many countries," it added.
posted by InCar Group Press Room at 11:32
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