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Emerging East Asia to grow 7.2 percent: report

Emerging East Asia's economy was projected to grow an average of 7.2 percent next year, helped by a turnaround in the global demand for IT products, an Asian Development Bank (ADB) report said yesterday.

The Manila-based ADB said emerging East Asia covers the 10 ASEAN member countries, China and South Korea.

This year, emerging East Asia's economy was estimated to expand 7.1 percent, according to the Asia Economic Monitor.

"Growth is forecast to ease to a shade below 9 percent in China, compared with the estimated 9 percent growth in 2005," the report said. "However, it will likely accelerate in most other major economies."

Singapore's economy is projected to grow 6 percent next year, up from 5.2 percent this year, while South Korea's economy will likely accelerate to 5 percent, up from 4 percent, the monitor said.

Indonesia's growth would increase to 5.9 percent next year from 5.5 percent this year, Malaysia to 5.3 percent from 5.1 percent, Thailand to 5 percent from 4.5 percent, the Philippines to 4.8 percent from 4.7 percent and Laos to 8 percent from 7.2 percent.

The report, however, warned that the forecasts were subject to four major risks -- disorderly adjustment of the growing global payments imbalance, a sharp upturn in the global interest-rate cycle, further oil-price hikes and a possible avian-flu pandemic.

It stressed the need for continued tightening of monetary policy and fiscal consolidation to sustain robust growth and at the same time keep inflation in check.

"Greater exchange rate flexib-ility could be utilized more to help contain inflation and at the same time rebalance the sources of growth away from experts to domestic demand," said Masahiro Kawai, head of the Office of Regional Economic Integration.

Meanwhile, the Japanese government remained upbeat about the economy in its latest monthly report yesterday, upgrading its view of industrial production, citing a steady manufacturing expansion and a sunny outlook for output.

The Cabinet Office's economic report for December kept the same language as in its previous reports for the fifth straight month, affirming that the economy was ``recovering at a moderate pace.''
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