Asia to keep growth in face of global headwinds: ADB


HONG KONG — Emerging Asian economies will experience flat growth this year before recovering in 2013, the Asian Development Bank (ADB) said in a regional report released Wednesday. The Asian Development Outlook report for 2012 said the region was shifting toward a “more sustainable long-run growth path” based on strong domestic demand instead of exports, which have been hit by wobbly Western demand. But the study also warned that the region’s rising wealth was fuelling inequality and income disparities, with the underprivileged at risk of being sucked into a “vicious circle” of poverty and neglect. The vast region’s gross domestic product (GDP) growth will “cool somewhat” to 6.9 percent in 2012, down from 7.2 percent last year, before edging higher again to 7.3 percent in 2013.

“Despite the weak global environment, developing Asia’s growth momentum continues,” it said. “Strong domestic demand provided necessary support in 2011, and this will need to continue in light of the soft export demand expected from the major industrial economies of the United States, eurozone, and Japan.” Even with a slowdown this year, developing Asian economies would easily outshine Europe, the United States and Japan where output is forecast to grow only 1.1 percent this year and 1.7 percent in 2013, the report said. “Continued uncertainties in the eurozone and a further slump in global trade pose the biggest threats to the growth outlook,” ADB Chief Economist Changyong Rhee said in a statement. “At the same time, Asian economies are gradually diversifying into new markets, private consumption is trending up and the region has limited direct financial exposure to the eurozone — which should help sustain its momentum.”