Asian economies set to outperform world: ADB
Asian economies set to outperform world: ADB
SINGAPORE (Reuter): Asia's already booming economies will continue to grow faster than those in any other region over the next two years, the Asian Development Bank (ADB) said yesterday.
Economic growth in Asia, stretching from Korea and Taiwan in the north down to Indonesia and west as far as Pakistan, will register a growth rate of 7.6 percent in calendar 1995 and 7.4 percent a year later, the regional bank said.
The bank said in its "Asian Development Outlook 1995 and 1996" that the global economy was headed for a fairly robust three percent growth rate in each of the next two years.
This would be fueled by strong growth in industrialized economies and greater intraregional trade in Asia and Latin America, the bank said in the outlook released here .
In Asia, the bank, which offers development loans and grants, singled out China as the region's most dynamic country, although its growth rate was forecast to slow gradually in the next two years from its recent high levels.
China's economy grew at 13.4 percent in 1993, but slowed to 11.8 percent in 1994. This year growth is forecast at 9.8 percent and in 1996 at 8.9 percent.
The ADB says the slowdown followed a period of rising inflation and exceptionally high levels of investment, which had posed considerable risks to economic stability and the sustainability of growth.
SE Asia
In Southeast Asia, the ADB expects large investments in infrastructure and the broader recovery in the world economy to power the region to another year of impressive achievement. Economic growth is forecast to rise 7.5 percent in 1995.
The only laggard will likely be the Philippines, where the ADB said growth will probably be around five percent in 1995 against 8.5 percent in Malaysia, 8.6 percent in Thailand, nine percent in Singapore and 7.1 percent in Indonesia.
In what the ADB describes as "transitional economies of Southeast Asia, Cambodia, Vietnam and Laos, the outlook predicts growth rates of six to 8.5 percent this year with Vietnam expected to hit nine percent growth in 1996.
The ADB said growth in India was likely to remain buoyant at about 6.1 percent in 1995 and 6.5 percent the next year.
The bank said there was growing consensus in the world the Indian market was on the threshold of taking off into high economic growth induced by externally oriented economic reforms.
In Pakistan GDP growth is expected to improve to 4.6 percent in 1995 and further to six percent in 1996.
"However, the deterioration of law and order conditions in Karachi must also be addressed urgently, as continuation will have an adverse long-term impact on all business activity..." the ADB said.
The ADB said it had examined the prospects of a Mexican-style financial crisis in Asia's emerging markets and found that, because of fundamental differences in economic management, none were likely to suffer the same problems.
The ADB said that industrial countries would enjoy their strongest growth in five years at 2.7 and 3.3 percent in 1995 and 1996 respectively, thanks to a relaxed monetary policy and low interest rates.
Germany was forecast to post at least three percent gross domestic product growth in 1995 and 1996, up from the 2.6 percent in 1994. Japan's 0.8 percent growth last year was forecast to increase to 2.1 and 3.4 percent in 1995 and 1996, respectively.
Growth in the United States was forecast to fall from four percent in 1994 to 3.0 in 1995 and 2.5 percent in 1996, although the ADB said it was "a sustainable growth path ... consistent with expansion in capacity ... without stimulating inflation."