The economies of East Asia will grow 8.8 percent this year but growth will taper off next year because of a weak global outlook and the phasing out of government stimulus programs, the Asian Development Bank (ADB) said yesterday.
The Manila-based development bank said in a report that growth in developing East Asian countries will ease to 7.3 percent next year.
“With stimulus being withdrawn and the recovery intact, growth in 2011 should moderate as the post-recovery phase kicks in,” the report said.
The bank had said in September that it was upgrading its outlook for East Asia to 8.4 percent because of faster-than-expected growth from China.
Yesterday, it said it had raised its growth forecast for China for this year to 10.1 percent, but kept its prediction for next year steady at 9.1 percent.
China’s booming economy, the world’s second biggest, shows signs of cooling after a strong performance in the first half, with strong export growth slowing because of weaker demand. Industrial production and fixed asset investment are also slowing, the bank said.
However, consumer spending in areas such as retail sales is robust, suggesting domestic demand will remain strong, it said.
Among other countries, Singapore will be the star performer of this year, with growth of 14 percent, but will drop sharply to 5 percent next year, the report said.
The region’s growth faces several obstacles, the ADB said, including surging inflation in several countries. There is also the possibility of a weaker and longer-than-expected recovery in developed countries.
Protectionism is also a concern, as countries try to keep their currencies from strengthening too much, which would make their exports less affordable. That may escalate into trade wars as countries set up trade barriers to protect their international competitiveness and exports, the bank said.
The report covered China, Hong Kong, Taiwan, South Korea, Singapore, Thailand, Vietnam, the Philippines, Malaysia, Laos, Indonesia, Cambodia, Myanmar and Brunei.