Thu, Mar 17, 2011 - Page 10 News List

Asia set for growth despite quake


People shop for food among almost empty shelves at a big-box supermarket in Tokyo yesterday. Supermarket shelves are running empty despite authorities assuring citizens there is no need to panic as a crisis unfolds at a quake-stricken nuclear power plant.

Photo: Reuters

Asia is poised for another year of solid growth this year even if the impact of the killer earthquake and tsunami on Japan remains unclear, Standard and Poor’s said yesterday.

“We expect the region to record another year of solid growth in 2011 after 2010 proved that Asia is emerging from the [global financial] crisis in a strong position, even as the economic picture for Japan following the recent earthquake remains less clear,” senior regional analyst Tom Schiller said.

“But growth presents a unique set of challenges for policymakers, officials and investors across the Asia-Pacific region,” he said.

However, growth for the region, with the exception of Australia and New Zealand, is expected to moderate slightly from last year because of ongoing worries over the US and eurozone economies, Standard and Poor’s said.

Inflationary pressure is a key concern for the region, which faces the prospect of tighter monetary policies as authorities seek to temper price rises, it said in its twice-yearly regional outlook.

“Rising prices stem in part from rapid growth and the easy credit conditions that the region’s governments put in place to support their economies during the global financial crisis,” the credit ratings firm said. “We expect the region’s central banks to continue to tighten monetary policy this year.”

That means central banks will raise interest rates to fight inflation.

Standard and Poor’s also said regional central banks may also consider further capital control measures and other actions to prevent risky assets bubbles.

Powerhouse China is projected to grow between 9.1 and 9.6 percent this year, lower than last year’s 10.3 percent, and this is expected to impact the rest of the region, Standard and Poor’s said.

“Chinese authorities are adopting measures to rein in expansionary monetary policy to help combat rising inflation, escalating asset prices and higher wage inflation,” it added. “We expect these tightening measures are likely to prune money supply and credit growth in 2011. Slowing growth in China is likely to drag on growth around the region, in our view, with many nations beginning to post softer growth numbers.”

Japan, which is struggling to cope with the devastation wrought by a magnitude 9.0 earthquake and tsunami on Friday that triggered a crisis at a nuclear power station, is seen as growing between 1.3 and 1.8 percent.

The world’s third-largest economy expanded 4 percent last year.

South Korea’s economy is projected to grow between 4.3 and 4.8 percent from 6.1 percent last year.

Within Southeast Asia, Singapore’s growth is to moderate sharply to between 4.5 and 5.0 percent from 14.5 percent last year, Malaysia is seen expanding between 4.8 and 5.3 percent and Indonesia to grow between 5.9 and 6.4 percent from 6.1 percent.

The Philippines is expected to grow between 5.1 and 5.6 percent this year from 7.3 percent and Thailand’s economy will ease to between 4 and 4.5 percent from 7.8 percent.

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