Asian GDP growth seen at 7.5 percent: CSFB

Asian GDP growth seen at 7.5 percent: CSFB

Agence France-Presse
Singapore

Robust domestic demand in China and India will help lead non-
Japan Asia to strong gross domestic product growth of 7.5 percent
next year, investment banker Credit Suisse Frist Boston (CSFB)
said on Tuesday.

Improved conditions for exports and the gradual phase-out of
monetary tightening across the region will further fuel the
growth, CSFB said.

It forecast regional growth in gross domestic product (GDP),
the total value of all goods and services produced in the
countries, to reach 7.5 percent in 2006 and 7.2 percent in 2007,
up from an estimated 7.1 percent growth in 2005.

"In China, GDP is expected to grow to 10.1 percent in 2006 and
India is expected to see GDP expansion at 8.5 percent," CSFB
said.

China on Tuesday upgraded growth estimates by nearly 17
percent or US$284 billion for 2004, an unprecedented move that
could rank it as the world's fourth-largest economy.

"Driving the growth is an increase in infrastructure and real
estate investment spending in China -- particularly in second and
third tier cities, while at the same time, fiscal and tariff
reduction measures have been implemented to boost domestic
consumption," CSFB said.

It said there are signs of accelerated investment in India,
too, and increasing evidence of consumption growth spreading out
from the big cities, aided by migrant worker remittances.

CSFB said the region's export outlook is also favorable.
Global real GDP growth is expected to improve in the first half
of 2006, to six percent, which it said should be particularly
beneficial to Hong Kong and Thailand.

Hong Kong's GDP should grow by 4.4 percent while Thailand's is
expected to rise 4.7 percent, the investment banker said.

Increasing exports should push Singapore's GDP growth to six
percent, it said.

"This growth momentum, however, is likely to result in an
increase in inflation and CSFB forecasts inflation at four
percent across non-Japan Asia in 2006," it said in a statement.

Another investment banker, Morgan Stanley, last week upgraded
its 2006 GDP growth forecast for non-Japan Asia from 5.5 percent
to 6.2 percent on strong export momentum and falling oil prices.