ADB Forecast Predicts Good Outlook for Emerging Asian Economies

The chief economist of the Asian Development (ADB) Bank Changyong Rhee declared that Asia’s economies are riding a positive wave. The trend sees the economic growth of the region expanding from 6-7% per annum. The forecast covers Asia’s developing markets namely Thailand, Indonesia, India, and China, the biggest economy in the region. The term “Developing Asia” essentially includes 45 newly-industrialized countries in the Asia-Pacific Region, except Japan, the third biggest economy in the world.

In the projection made just half a year ago by the Asian Development Bank, Asia’s development was not yet predicted to be stable as current forecasts reveal. The forecasts are presented in ADB‘s 2013 Asian Development Outlook.

Predicted rate of growth

Compared to the pace that characterized the region’s growth before the onset of the worldwide financial crisis, this rate is slow, but analysts are confident that this rate will characterize the growth of the region in the next decade. This year the expected rate of growth is 6.6%. In 2014, this could increase to 6.7%. The region’s expansion rate for 2012 was determined to be 6.1%. The growth of these economies will not be even. The projection for China is at 7-8% while Taiwan, Singapore and Hongkong are predicted to grow at 3%. In the middle range are Malaysia and Thailand with a predicted growth of 5%.

There are a number of factors contributing to the growth of developing Asian countries. ADB’s chief economist Mr. Rhee attributes the positive trend mainly to the resilience of these emerging economies and the rate of growth in China. In the meantime, The Euro Zone and the United States are also projected to overcome their own crises in the foreseeable future.

Potential risks

In the midst of the positive forecasts are potential risks that the region would need to face in the next few years. The risks are brought about by events happening on other parts of the world. The primary risks might arise from European countries that are implementing austerity measures and the issues that surround the US debt ceiling. The United States remains the world’s biggest economy.

Other risks are more local in origin. These include possible consequences in the region of monetary stimulus efforts happening elsewhere, and current political disputes in Asia itself such as border issues, particularly on island territories being claimed by more than one Asian nation. The report identifies political issues at the main source of risks that developing Asian economies would need to face.

Stern warning

One important consequence of Asia’s expansion and growth concerns its energy consumptions. The region’s reliance on fossil fuels is only increasing. The ADB warned the developing Asian economies of potential environmental disaster in the near future due to its “dangerously unsustainable” direction that the region is taking as a consequence of their current energy choices. It is predicted that by 2035 Asia would be consuming greater than 50% of the global energy supply. It must explore clean and sustainable energy options and soon, according to Mr. Rhee. If not, its carbon dioxide emissions would definitely double in just 15 years.