Growth forecast to rise in emerging Asia
Asian Development Bank's annual outlook also sounds note of caution over inflation and asset bubble risks posed by strong capital inflows
Growth in developing Asia will accelerate this year, thanks to a recovery in the mainland's economy and robust expansion in Southeast Asia, but governments should ward off capital inflows to avoid stoking inflation, the Asian Development Bank says.
Rising private consumption and stronger intraregional trade were expected to spur a pickup in growth in developing Asia this year and next, the bank said in its 2013 Asian Development Outlook, released yesterday.
It forecasts growth of 6.6 per cent this year and 6.7 per cent next year in Asia's 45 developing economies. The region's gross domestic product growth rate was 6.1 per cent last year.
"The rebound in China and solid momentum in Southeast Asia are lifting the region's pace after the softer performance last year," said Changyong Rhee, the chief economist at the Manila-based lender.
The bank expects the mainland's economy to expand 8.2 per cent this year after growth of 7.8 per cent last year, driven by strong domestic consumption and investment. Its forecast is 0.1 percentage point higher than the prediction it made in December. It forecasts 3.5 per cent GDP growth for Hong Kong this year and 3.8 per cent next year.
Among Southeast Asian nations, the bank expects Indonesia to lead the region, with 6.4 per cent growth this year and 6.6 per cent in 2014.
Its report said capital inflows to the region's 10 large economies - mainland China, Hong Kong, India, Indonesia, Japan, South Korea, the Philippines, Singapore, Taiwan and Thailand - climbed to an average 7.4 per cent of GDP in the three years to 2012. That was up from 1.7 per cent in the previous three years and near the average of 8.4 per cent before the global financial crisis.