UN tips 6.2% growth in Asia-Pacific

UN tips 6.2% growth in Asia-Pacific

Agence France-Presse, Bangkok

Economies in 38 developing countries in the Asia Pacific
region should grow by 6.2 percent next year, on level with this
year's 6.3 percent, the UN's regional body said on Wednesday.

Oil prices were expected to remain high and volatile in 2006
at around US$50 a barrel, while increasing imbalances between low
savings in the United States and high savings in Asian countries
needed to be addressed, it said.

Members should also create an emergency health fund to help
poorer countries combat the deadly threat of bird flu, the UN's
Economic and Social Commission for Asia and the Pacific's (ESCAP)
said in a report.

"Prospects for the ESCAP region for 2006 indicate that output
growth is likely to maintain its current resilience, while price
pressures should abate despite continuing high energy and
commodity prices," the report said.

"Within the ESCAP region, Southeast Asia, South and Southwest
Asia and the Pacific island countries should experience a slight
acceleration in their GDP growth rates in 2006."

North and Central Asia, East and Northeast Asia and the
developed countries are likely to experience a mild deceleration,
the report added.

Inflation within developing countries in the region was
estimated at 4.8 percent in 2005, and is expected to decline
slightly to 4.4 percent next year.

In Southeast Asia, real GDP growth was forecast at 5.1 percent
this year, rising to 5.4 percent next year, while inflation was
tipped to fall to 4.9 percent next year from 5.2 percent.

Growth in East and Northeast Asia for 2005 was estimated at
6.6 percent, falling to 6.4 percent in 2006, while inflation was
forecast to stay flat, to 2.3 percent next year from 2.2 percent,
the report said.

UNESCAP calculations predict for every $10 a barrel increase
in oil prices lasting six months, GDP growth in the region
declines 0.5 percent, while inflation increases 0.5 percent,
executive director Kim Hak-Su told reporters.

"Oil importing economies certainly would be most affected, and
policy responses are needed, among others maybe phasing out oil
subsidies ... and more incentives for energy efficiency and
conservation," he said.

The report urged Asian economies to use the region's strong
rate of savings to finance projects such as building much-needed
physical infrastructure.

It also recommended a new fund to offset the effects of bird
flu, which has cost the Asian poultry industry losses of about
$10 billion since the H5N1 virus was found in late 2003,
affecting mostly small farmers with no alternative income.

An emergency health fund would mean richer countries could
pool their money to assist poorer countries such as Cambodia and
Laos to battle the disease, Kim added.

Asked what economic matters would be priorities for 2006, Kim
said oil prices, followed by the threat of avian influenza.

"Avian flu it's uncertain but (if) it will happen, it will
kill our tourism," he said.