Softer than expected economic activity in China and India and jitters over tapering of the US quantitative easing (QE) program will weigh on APAC growth prospects in the near term, says a new Asian Development Bank (ADB) report. APAC growth in 2013 "will come in below earlier projections due to more moderate activit
Softer than expected economic activity in China and India and jitters over tapering of the US quantitative easing (QE) program will weigh on APAC growth prospects in the near term, says a new Asian Development Bank (ADB) report.
APAC growth in 2013 "will come in below earlier projections due to more moderate activity in the region's two largest economies and effects of QE nervousness," said ADB Chief Economist Changyong Rhee. "While economic activity will edge back up in 2014, current conditions highlight the need for the region to exercise vigilance to safeguard financial stability in the short term while accelerating structural reforms to sustain economic growth in the longer term."
In an update of its annual economic publication, Asian Development Outlook 2013 (ADO 2013), ADB revised down its 2013 GDP growth forecast for the region to 6% from 6.6% seen in April. For 2014, growth is now projected at 6.2% from 6.7% in April. In 2012, growth came in at 6.1%.
Southeast Asia's growth will be crimped by the soft performances of its three biggest economies with lackluster exports and moderating investment weighing on Indonesia, Thailand and Malaysia. By contrast, the Philippines is expected to continue to perform strongly. The subregion will grow 4.9% in 2013, with the pace set to quicken to 5.3% in 2014, as it benefits from an investment recovery and firmer exports, supported by improved global trade and recent currency depreciations.