Asia’s economic growth will likely be hurt by the slowdown in the United States and Europe, but the impact should be minimal, an Asian Development Bank (ADB) official said yesterday.
ADB chief economist Changyong Rhee said the development institution is expected to slash its economic growth forecast for Asia’s developing economies this year and next.
“Definitely, it’s going to slow down and we have already started to see some slowdown in exports from Asia,” he told journalists in Singapore.
“But having said that, I believe that the current situation at this moment is not like the crisis in 2008. We believe that Asian economic growth at this moment is robust and resilient enough to cope with a slowdown in the advanced economies.”
The ADB in March forecast developing Asia would grow 7.8 percent this year and 7.7 percent next year.
Rhee said however the ADB may have to revise its projections “slightly downwards” when it releases its latest outlook in September.
“As long as it (the economic slowdown) is not like 2008, Asia has more resilience to continue its growth momentum and still remain as an engine of growth for the the global economy,” he said.
Rhee added that another “full-blown” global recession such as the one that happened in 2008 was “very unlikely.”
Asia rebounded faster than the rest of the world after the 2008 recession which was sparked by problems in the US housing market and lasted well into 2009.
Rhee also said that the ADB will raise its inflation target this year above its earlier forecast of 5.4 percent after consumer prices rose higher than expected in the first six months.
The ADB, however, indicated that most Asian economies have not done enough to provide good jobs and adequate social benefits for their people, despite rapid economic growth over 20 years.
Poor social provision and the tensions it often produces could hamper the region’s long-term growth prospects, said the Manila-based lender, urging countries to tap their high savings to improve social safety nets.
Asia grew an average 6.4 percent per year between 1990 and 2008, much faster than the rest of the world, including developed countries in the OECD, which expanded by an average 1.8 percent in the same period.
The growth has led to a higher number of Asians finding jobs and 150 million people being hauled out of poverty, the ADB said.
But job creation and poverty reduction have been very uneven across the region, it said.
“Asia continues its high and resilient growth of the last two decades, but behind this rosy picture, we have to remember that progress is uneven,” ADB chief economist Changyong Rhee told reporters in Singapore.
“Poverty still remains high in many low-income countries… Asia is far behind in terms of quality employment,” he said.
“We have done a lot, but on the other end, there is much room for us to improve… We are still in a situation with low quality public services,” said Rhee. –Daily Tribune
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