Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
0 of .
Results for:
No results containing your search query
P. 1
Asian Development Outlook 2007 Highlights

Asian Development Outlook 2007 Highlights

Ratings: (0)|Views: 35 |Likes:
The Asian Development Outlook 200 Highlights outlines the most important content of the ADO.
The Asian Development Outlook 200 Highlights outlines the most important content of the ADO.

More info:

Published by: Asian Development Bank on Feb 24, 2011
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less





Developing Asia’s expansion gathered speed in 2006. Regional GDP grewat 8.3%, aster than any year since 1995. Growth was aided by a highlyavorable external environment, benign domestic circumstances, goodeconomic management, and the ruits o reorm eorts.But evidence o imbalances and overheating continued to gather: surgingproperty and equity markets, ast credit expansion, and rising goods prices,particularly o oodstus. Authorities answered by raising interest rates,mopping up excess liquidity, and restraining credit growth and publicspending. But structural responses have been slower. Widening currentaccount surpluses as well as capital inows contributed to a urther buildupo international reserves. In trade-weighted terms, and adjusted orination, many regional currencies appreciated in 2006, though someremained broadly unchanged. Inequality, job creation, and environmentalpressures are growing concerns.Although the pace o expansion is expected to ease in 2007 and 2008,growth is still set to remain brisk. Net exports’ contribution to growth willsoten, but strengthening domestic demand will ll part o the gap.Another year o strong perormance should see GDP growth o 7.6% in2007, with little change in tempo in 2008. In response to tighteningmeasures and lower oil prices, inationary pressures should start to recede.Current account surpluses will begin to narrow as a share o GDP, butslowly.
Growth in 2006 is theastest since 1995Growth in 2006 is theastest since 1995Stresses and imbalancesbecome more visibleStresses and imbalancesbecome more visibleBrisk expansion isexpected in 2007 and2008Brisk expansion isexpected in 2007 and2008
HighlightsADO 2007
Developing Asia’s perormance in 2006 was exceptional. Strong growth o 7.6% looks set or 2007,and infationary pressures should ebb. Managing macroeconomic stresses, moving ahead with microreorms, and rebalancing economic growth are important challenges. Asia also needs to do betterat creating jobs.
Asian Development Outlook 2007 
Performance in 2006
Prodigious growth in the People’s Republic o China (PRC) and Indiaunderpinned aggregate regional expansion in 2006. The share o both inregional output continued to increase.In the PRC, rapid expansion o exports and strong xed asset investmentspurred growth to 10.7% in 2006. To cool the economy, the authoritiesraised interest rates, increased bank reserve requirements, mopped upexcess liquidity in the nancial sector, and applied a rat o administrativecontrols intended to curtail or delay new projects. Fixed asset investmentslowed in the second hal, but export growth continued unabated, andthe current account surplus swelled to 8.6% o GDP. Reserves in the PRCbroke through the $1 trillion mark. Ination rose toward the end o theyear, largely as a result o rising grains prices. Elsewhere, avorablecommodity prices helped lit growth in Mongolia. Korea expanded by arobust 5%. East Asia’s growth accelerated to 8.7% in 2006.In India, vibrant industrial growth as well as buoyant services helpedgrowth accelerate to an estimated 9.2%. Manuacturing exports expandedat a ast clip. Employment in manuacturing also picked up. But steadilyrising wholesale price ination, booming property prices, and ballooningcredit growth has prompted the Reserve Bank o India to crank up policyrates and to impose restraints on lending to the property sector. Sluggishagricultural productivity growth remains a concern as the majority o India’s population still depends on agriculture or their livelihoods. Sharprises in ood prices have underlined the need or structural reorms.Trend growth in Bangladesh and Pakistan again accelerated in 2006, butthe countries’ perormance on ination was less impressive. In Bangladesh,annual ination picked up in response to ast credit growth, pass-throughto consumers and producers o oil-price rises, and higher commodityprices. In Pakistan, ination came down rom its earlier peak in 2005, butremained well above target. In the Maldives, growth in 2006 bouncedback as it recovered rom the devastation o the tragic tsunami. Despitehostilities, ueled by expansionary spending policies, growth acceleratedin Sri Lanka. Political developments continued to dominate in Nepal, andgrowth remained anemic. A drought dragged down growth in Aghanistan,while Bhutan beneted rom increased hydropower exports to India. ForSouth Asia as a whole, growth o 8.7% was the astest since 1988.Azerbaijan and Kazakhstan’s perormance beneted rom high oil prices.Although oil prices drited down in the ourth quarter, average prices in2006 were still 20% higher than in 2005. A housing boom and heavyinvestments in mineral development sustained Armenia’s rapid growth.In the Kyrgyz Republic, growth was slow, due to weak gold productionand lingering political difculties. Strong remittances, as well as healthyaluminum output and exports, sustained growth in Tajikistan. Uzbekistankept up its solid growth record, helped by continued arm privatization.Central Asia’s GDP grew at 12.4%.Southeast Asia’s perormance was patchy. Growth in Indonesia was lamedue to weak consumption and xed investment spending. But as monthlyination rates eased, Bank Indonesia lowered policy rates. In the Philippines,growth edged up on a strong recovery in agriculture, but investment
The PRC and India’sweight in regionaloutput is getting largerThe PRC and India’sweight in regionaloutput is getting largerThe PRC grows at ablistering 10.7%The PRC grows at ablistering 10.7%India consolidates astgrowthIndia consolidates astgrowthCentral Asia booms onoil price gainsCentral Asia booms onoil price gainsSoutheast Asia showscheckered growthSoutheast Asia showscheckered growthTrend growth inBangladesh and Pakistanaccelerates
stayed weak. Net exports lited Thailand’s growth, but domestic demandwas crimped by earlier increases in interest rates and by gathering politicaluncertainty. In Malaysia, strong growth o domestic consumption helpedlit growth; public investment spending accelerated. Viet Nam’s impressiverun o rapid growth continued: strong domestic demand growth wassupported by gains in oil prices and by vibrant exports. Cambodia and theLao People’s Democratic Republic both showed healthy expansion.Aggregate growth in Southeast Asia was 6.0% in 2006.The Pacic islands grew at 3.1%. The two largest economies, Papua NewGuinea and Fiji Islands, both enjoyed aster expansion, liting the average.In Timor-Leste, civil disorder and security problems stymied growth o thenon-oil economy. Elsewhere, perormance was uneven. Overall in thePacic, outcomes remain largely unimpressive and are constrained as muchby economic mismanagement and ineective institutions as by thedisadvantages o small size and remoteness.
International outlook 
Prospects or the international economy remain broadly avorable. Despiteproduction cuts by the Organization o the Petroleum Exporting Countries,crude oil prices are well o their highs o August 2006. Some metalsprices, such as copper, have also come down. Lower commodity priceswill generally ease inationary pressures and bring terms-o-trade gains,as developing Asia is a net importer.Growth in the major industrial economies is set to slow, but growth in theeuro zone and Japan is close to potential. Inationary pressures seem tobe slowly dissipating in the United States (US). Corrections in the housingmarket there have been sharp, but not disorderly. There is now lessdissonance about the outlook, and the chances o a recession are receding(though not completely), and so ar markets have absorbed risks. Asinvestment spending pulls back, US growth is expected to slow in 2007.In Europe, the outcome in 2006 was the best in 6 years and momentumhas picked up. Germany leads the way, but business and consumercondence is more broadly strong. Growth may moderate a little in 2007.In Japan, domestic demand has come back to lie ater temporarily saggingin the middle o 2006. Employment growth and positive business sentimentshould help support demand, and growth should nearly match 2006’sperormance. Although the Bank o Japan raised interest rates in February,tightening is expected to be gradual.With easing o industrial output growth, global trade volumes will expandless quickly than last year, but at a still-robust pace. However, there areindications that the global electronics cycle could slip a gear, and i capitalspending slows more quickly than anticipated in the US, the downdratwould be elt by Asian producers.
Growth lags in PacicislandsGrowth lags in PacicislandsCommodity prices areset to sotenCommodity prices areset to sotenGrowth is seenmoderating in G3Growth is seenmoderating in G3Growth o tradevolumes will stay robustGrowth o tradevolumes will stay robust

Activity (3)

You've already reviewed this. Edit your review.
1 thousand reads
1 hundred reads

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->