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| [PHOTO: 401(K) 2012/Flickr/CC BY-SA 2.0] |
Manila: The surging economies of Southeast Asia have been a bright
spot in developing Asia’s otherwise subdued 2012 growth performance, but the
broader region should still pick up steam in 2013, says a new Asian Development
Bank (ADB) report.
The latest Asian
Development Outlook Supplement, released today, says developing Asia will post
growth of 6.0% in 2012 and 6.6% in 2013, 0.1% percentage point lower than
anticipated by ADB in October. Robust private consumption in Southeast Asia and
a mild economic recovery in People’s Republic of China (PRC) nearly balance out
the weaknesses in India’s economy. The report warns that ongoing sluggishness
and uncertainty in Europe and the United States mean that risks to the
forecasts remain firmly on the downside.
“Enduring debt
problems and economic weakness in Europe and the looming fiscal cliff in the
United States remain very real threats to developing Asia next year,” said ADB
Chief Economist Changyong Rhee. “At the same time there are highly encouraging
signs from Southeast Asia and recent data from PRC confirms a bottoming out of
the economy, with industrial output rebounding to a five-month high in
October.”
Malaysia and the
Philippines outstripped expectations, with strong third quarter performance
boosting ASEAN-5 growth forecasts from 5.6% to 5.9%. Third quarter expansion in
the Philippines was a stellar 7.1%, more than double the rate from the same
period a year earlier.
This performance and
the recovery in PRC―supported by a turnaround in industrial production and
retail sales and solid fixed investment―are helping to offset weakness in other
East Asian economies, including Hong Kong, China; the Republic of Korea; and
Taipei,China.
India’s economy
remains sluggish, with sliding industrial production and declining exports.
Growth in Central Asia is also soft, pulled down by difficulties in its two
largest economies―Azerbaijan and Kazakhstan. Pacific economies, led by
resource-rich Papua New Guinea, Solomon Islands and Timor-Leste, are continuing
to benefit from infrastructure rollouts which should support growth of 6% in
2012, but the expansion will moderate in 2013, the report says.
Inflation remains
broadly benign across most of the region as a result of price declines in some
food commodities, including soybean and palm oil. Inflationary pressures remain
a concern in South Asia, however, with the subregion expected to post an annual
inflation rate of 8.3% in 2012. An expected spike in meat prices, lower output
of grains, and higher global demand will see inflation for developing Asia tick
up to 4.2% in 2013, from a revised rate of 4.0% in 2012.