The surging economies of Southeast Asia have been a bright spot in developing Asia’s otherwise subdued 2012 growth performance, but the broader region should still pick up steam in 2013, says a new Asian Development Bank (ADB) report.
The latest Asian Development Outlook Supplement, released December 7, says developing Asia will post growth of 6 percent in 2012 and 6.6 percent in 2013, 0.1 percentage point lower than anticipated by ADB in October.
Robust private consumption in Southeast Asia and a mild economic recovery in China nearly balance out the weaknesses in India’s economy. The report warns that ongoing sluggishness and uncertainty in Europe and the United States mean that risks to the forecasts remain firmly on the downside.
“Enduring debt problems and economic weakness in Europe and the looming fiscal cliff in the United States remain very real threats to developing Asia next year,” said Changyong Rhee, ADB chief economist. “At the same time there are highly encouraging signs from Southeast Asia and recent data from PRC confirms a bottoming out of the economy, with industrial output rebounding to a five-month high in October.”
Malaysia and the Philippines outstripped expectations, with strong third-quarter performance boosting the growth forecasts for the Association of Southeast Asian Nations-5 (comprised of Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) from 5.6 percent to 5.9 percent. Third-quarter expansion in the Philippines was 7.1 percent, more than double the rate from the same period a year earlier.
This performance and China’s recovery are helping to offset weakness in other East Asian economies, including Hong Kong, China, and South Korea, the ADB said.
India’s economy remains sluggish, with sliding industrial production and declining exports. Growth in Central Asia is also soft, pulled down by difficulties in its two largest economies―Azerbaijan and Kazakhstan. Pacific economies, led by Papua New Guinea, Solomon Islands, and Timor-Leste, continue to benefit from infrastructure rollouts that should support a growth of 6 percent in 2012, but the expansion will moderate in 2013, the report says.
Photo: Kyle Taylor
