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.