HONG KONG, Dec. 14 (Kyodo) - Economic growth in emerging economies of East Asia next year will ease a bit from 2007 due to the slowdown of the U. S. economy, the credit outlook and rising oil and commodity prices, the Asian Development Bank said Thursday.
The Philippines-based bank, in the December edition of its semiannual Asia Economic Monitor, said economic growth in emerging East Asia will ease to 8 percent in 2008 from 8. 5 percent in 2007 as expansion in key industrialized nations moderates amid volatility in financial markets and rising oil prices.
''Slower growth but rising inflationary pressures -- despite appreciating currencies -- pose major challenges for the region's policy-makers,'' the report said.
The emerging economies were identified as China, Hong Kong, Taiwan, South Korea and the 10 members of the Association of Southeast Asian Nations, which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The report said China's growth is forecast to slow from 11. 4 percent in 2007 to 10. 5 percent next year if measures to cool the economy begin to take hold, the report said.
A series of tightening measures has been introduced by Beijing to curb rapid investment growth and asset-price inflation since mid-2006, but the full effect has yet to be seen.
Growth in the ASEAN region will slightly moderate to 6. 1 percent next year from 6. 3 percent in 2007, the report said, The report said a hard landing of the U. S. economy could have a significant impact on the emerging East Asia's growth as trade linkages with the major industrialized economies remain strong.
''The U. S. current account deficit this year is expected at 5. 6 percent of GDP, down sharply from 6. 2 percent last year.
Still, resulting global imbalances remain extremely large.
''To the extent that the ongoing correction in global financial markets may reflect the dynamics of underlying market forces to reduce the scale of global imbalances -- which entails a U. S. dollar depreciation, U. S. economic slowdown, and reduction of U. S. dollar asset returns -- even a gradual and thus protracted unwinding process would have significant impact on emerging East Asian markets,'' it said.
In conclusion, the report said that against a backdrop of continued uncertainty over the future growth outlook and global financial stability, ''deeper and more comprehensive'' financial sector and market reforms are required to enhance flexibility and resiliency of the region's banking and financial systems.
''Strengthening regulatory and supervisory frameworks is particularly important for emerging East Asian markets that employ relatively weak financial market infrastructure for credit risk assessment and effective risk management,'' it said.
''Formulating an appropriate policy framework to prepare for possible risks from continued global financial instability can help insulate emerging East Asia from any major deleterious effects.''
The Philippines-based bank, in the December edition of its semiannual Asia Economic Monitor, said economic growth in emerging East Asia will ease to 8 percent in 2008 from 8. 5 percent in 2007 as expansion in key industrialized nations moderates amid volatility in financial markets and rising oil prices.
''Slower growth but rising inflationary pressures -- despite appreciating currencies -- pose major challenges for the region's policy-makers,'' the report said.
The emerging economies were identified as China, Hong Kong, Taiwan, South Korea and the 10 members of the Association of Southeast Asian Nations, which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The report said China's growth is forecast to slow from 11. 4 percent in 2007 to 10. 5 percent next year if measures to cool the economy begin to take hold, the report said.
A series of tightening measures has been introduced by Beijing to curb rapid investment growth and asset-price inflation since mid-2006, but the full effect has yet to be seen.
Growth in the ASEAN region will slightly moderate to 6. 1 percent next year from 6. 3 percent in 2007, the report said, The report said a hard landing of the U. S. economy could have a significant impact on the emerging East Asia's growth as trade linkages with the major industrialized economies remain strong.
''The U. S. current account deficit this year is expected at 5. 6 percent of GDP, down sharply from 6. 2 percent last year.
Still, resulting global imbalances remain extremely large.
''To the extent that the ongoing correction in global financial markets may reflect the dynamics of underlying market forces to reduce the scale of global imbalances -- which entails a U. S. dollar depreciation, U. S. economic slowdown, and reduction of U. S. dollar asset returns -- even a gradual and thus protracted unwinding process would have significant impact on emerging East Asian markets,'' it said.
In conclusion, the report said that against a backdrop of continued uncertainty over the future growth outlook and global financial stability, ''deeper and more comprehensive'' financial sector and market reforms are required to enhance flexibility and resiliency of the region's banking and financial systems.
''Strengthening regulatory and supervisory frameworks is particularly important for emerging East Asian markets that employ relatively weak financial market infrastructure for credit risk assessment and effective risk management,'' it said.
''Formulating an appropriate policy framework to prepare for possible risks from continued global financial instability can help insulate emerging East Asia from any major deleterious effects.''
1 comment:
This call for all ASEAN's members to work together to help keep the economy from sliding down hill.
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