Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
3Activity
0 of .
Results for:
No results containing your search query
P. 1
Asian Development Outlook 2010 Highlights

Asian Development Outlook 2010 Highlights

Ratings: (0)|Views: 26 |Likes:
Developing Asia can look ahead to a robust recovery in the next 2 years. Growth is forecast to rise to 7.5% in 2010 and moderate to 7.3% in 2011, marking a healthy rebound from the 2009 slowdown. Shifting the drivers of growth from the support of monetary and fiscal expansion to robust private sources is now the key challenge for sustaining the recovery, both globally and regionally. Inflation pressures are increasing but still manageable in most developing Asian economies. Beyond the crisis, developing Asia faces the challenge of adjusting its monetary, exchange rate, and fiscal policies to foster macroeconomic stability and sustained growth within the broader direction of a return to prudence and discipline.
Developing Asia can look ahead to a robust recovery in the next 2 years. Growth is forecast to rise to 7.5% in 2010 and moderate to 7.3% in 2011, marking a healthy rebound from the 2009 slowdown. Shifting the drivers of growth from the support of monetary and fiscal expansion to robust private sources is now the key challenge for sustaining the recovery, both globally and regionally. Inflation pressures are increasing but still manageable in most developing Asian economies. Beyond the crisis, developing Asia faces the challenge of adjusting its monetary, exchange rate, and fiscal policies to foster macroeconomic stability and sustained growth within the broader direction of a return to prudence and discipline.

More info:

Categories:Types, Business/Law
Published by: Asian Development Bank on Feb 24, 2011
Copyright:Attribution Non-commercial

Availability:

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

02/11/2013

pdf

text

original

 
Highlights
ADO 2010 
Developing Asia can look ahead to a robust recovery in the next   years. Growth is orecast to rise to 7.5% in  and moderate to7.3% in , marking a healthy rebound rom the 9 slowdown.Shiting the drivers o growth rom the support o monetary and scal expansion to robust private sources is now the key challengeor sustaining the recovery, both globally and regionally. Infationpressures are increasing but still manageable in most developingAsian economies. Beyond the crisis, developing Asia aces thechallenge o adjusting its monetary, exchange rate, and scal policiesto oster macroeconomic stability and sustained growth within thebroader direction o a return to prudence and discipline.
 
2
Asian Development Outlook 2010
Key messages
Developing Asia weathered the harsh global environment in 2009 well. It was the 
z
rst region to emerge rom the global turmoil, helped by decisive policy responses.Supported by improving global prospects, the
Asian Development Outlook 2010
 (
ADO 2010
) projects developing Asia’s growth to rebound to 7.5% in 2010, a strongacceleration rom 5.2% in 2009, though still well below the record 9.6% growth o 2007. The region aces the challenge nonetheless o maintaining momentum againstthe backdrop o a gradual unwinding o expansionary measures and a slow pickupin external demand. The projection or 2011 is a moderate 7.3%.As recovery takes hold, ination pressures, particularly in asset prices, may well 
z
start to mount in the region.
ADO 2010
projects that ination will increase, but toa still moderate 4.0% in 2010, conditional on the implementation o appropriatepolicy measures. Unusually easy monetary policy throughout the region cannotbe kept or too long, and there is a need to revert to a normal stance. The surplusin developing Asia’s current account balance narrowed or a second consecutiveyear to 4.9% o gross domestic product (GDP) in 2009 rom a recent peak o 6.5%in 2007. It is orecast to narrow urther to 4.1% in 2010 and 3.6% in 2011.Several downside risks to the global outlooka slower global recovery, mistimed 
z
withdrawal o macroeconomic stimulus measures, a sharp increase in internationalcommodity prices, deteriorating scal positions, and the persistence o globalimbalancescould derail developing Asia’s growth momentum. In addition,the region’s stronger recovery and higher interest rates relative to those in themajor industrial countries are already attracting potentially volatile capitalows, complicating macroeconomic management. Rising ood prices, whichdisproportionately impact the poor, also pose a risk.Beyond the global crisis, the region’s policy makers ace the challenge o adapting 
z
monetary, exchange rate, and scal policies to oster stable and sustainable growth.A long-standing tradition o scal and monetary prudence served the region wellduring the crisis. For example, ample scal space built up over years o sustainedscal discipline enabled the unleashing o decisive and large scal stimulusprograms. Part 2 o 
ADO 2010
calls or the region to remain aithul to sound andresponsible scal and monetary policy, while adapting those policies appropriatelyas recovery takes hold and the economic crisis recedes.There is plenty o scope or improving and strengthening Asia’s monetary, exchange 
z
rate, and scal policy rameworks. As Part 2 lays out, such adjustments will enablethe region to better adapt to the postcrisis world. For example, while price stabilitymust remain the overriding objective o monetary policy, the global crisis highlightsthe need to prevent asset price bubbles, suggesting a need to improve coordinationbetween nancial regulation and monetary policy. In scal policy, while it is o paramount importance to saeguard sustainability with strong medium-term scalpolicy rameworks, a wide range o measures can contribute to more balancedgrowth by removing structural impediments to domestic demand. Finally, moreexible exchange rate systems are in the region’s own interest, and careullydesigned capital controls that mitigate disruptive capital inows may be desirableduring the transition to greater exibility, at least in the short run.
 
Highlights
3
Perormance in 2009
At 5.2% in 2009, developing Asia’s growth was its lowest in 8 years. Economies 
z
decelerated across the region, with only South Asia perorming marginally betterthan in 2008. The larger economies, such as the People’s Republic o China (PRC)and India, ared better. But or many economies, slower growth resulted rom asharp decline in exports to the industrialized world.Ination in developing Asia was subdued at 1.5%, held down by depressed economic 
z
activity and lower international commodity prices. In some economies, such as thePRC; Taipei,China; and Thailand, consumer prices even declined on average duringthe year as deation pressures persisted. Current account surpluses ell marginally.Although demand or the region’s exports slowed sharply, imports also weakened,leaving the surplus in developing Asia at 4.9% o GDP, down rom 5.4% the previousyear. Surpluses in East Asia, Central Asia, and the Pacic declined in 2009.Though most economies in East Asia contracted in 2009, solid growth in the PRC 
z
buoyed the aggregate perormance. Overall GDP expanded by 5.9%, almost entirelya result o 8.7% growth in the PRC, which was based heavily on exceptional scaland monetary stimulus adopted to combat the impact o the global recession.The Republic o Korea grew marginally, also helped by scal stimulus, but globalheadwinds battered Hong Kong, China; Mongolia; and Taipei,China, all o whichcontracted in 2009. Consumer prices ell slightly in the PRC and Taipei,China, andwere at on a subregional basis.Southeast Asia’s growth slowed sharply to just 1.2% in 2009, the weakest outcome 
z
since the 1997–98 Asian nancial crisis. Aggregate GDP would have declined i it had not been or relatively high growth o 4.5% in Indonesia, the subregion’sbiggest economy. Indeed, hal the 10 economies contracted (Brunei Darussalam,Cambodia, Malaysia, Singapore, and Thailand), as the global recession cut intoexports and investment ows. In many economies, imports ell even more steeplythan exports, such that the subregional current account surplus rose. Aggregateination decelerated to 2.7%.South Asian growth edged up to 6.5% in 2009 rom 6.4% in 2008, but only India and 
z
Aghanistan saw gains. India experienced a strong rebound to an estimated 7.2% orthe year, despite the impact o a drought on crops. Continued scal stimulus andmonetary easing in India over the year, alongside an improving global environment,prompted large capital inows as investor and consumer condence strengthened.Aghanistan recovered rom a drought, posting 15.1% growth. But the Pakistanieconomy again slowed, though macroeconomic imbalances narrowed, as worseningsecurity and power shortages obstructed any meaningul improvement in economicperormance. GDP growth also slipped in Bangladesh, Bhutan, Maldives, and SriLanka, although Sri Lanka revived markedly rom May, ater the end o its long civilconict. Ination in South Asia was back to around precrisis levels, at 5.6%.

Activity (3)

You've already reviewed this. Edit your review.
1 thousand reads
1 hundred reads
A.K.VADIVEL liked this

You're Reading a Free Preview

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