Asia’s emerging economies will slow next year as the global financial crisis saps export demand and capital flows, the Asian Development Bank (ADB) said yesterday.
Swift, decisive action by policy makers will help stem the impact of the crisis, the Manila-based bank said.
“The external economic environment for developing Asia is likely to worsen as major industrial economies contract further, global financial conditions remain constricted, and world trade growth slows sharply,” said the semiannual report, titled Asia Economic Monitor.
PHOTO: EPA
Collective economic growth in developing Asia — a sprawling region that includes 44 economies from the central Asia republics to the Pacific islands — is projected to expand 5.8 percent next year, down from an expected 6.9 percent this year, the report said.
“2009 is likely to be a difficult year for developing Asia but it will be manageable if countries respond decisively and collectively,” said Lee Jong-wha, head of the bank’s Regional Economic Integration office.
“Swift action by policy makers to stem both the threat to the financial systems and the real economy will allow most of the region’s economies to sustain a healthy if slower expansion,” Lee said.
Lee said Asian countries need to strengthen their coordination in exchange rates and fiscal policies to address the negative impact of the global financial crisis.
“Now the balance of risks has shifted from raising inflation to a slowing growth, so this can provide some margins for monetary authorities to ease,” Lee said in a news conference in Hong Kong.
Economies that depend on exports are particularly vulnerable.
“Weakening demand for manufactured goods in major industrial countries means declining export orders from Asia, with knock-on effects for industrial production,” the report said.
“Global trade volume is rapidly slowing down and is expected to barely expand in 2009, creating difficulties for regional economies that rely on exports for growth,” it said.
Meanwhile, aggregate GDP of East Asia — China, Hong Kong, South Korea, Mongolia and Taiwan but not Japan — is projected to grow by 6.2 percent next year, down from an expected 7.4 percent this year.
China’s economic gallop is expected to slow to 8.2 percent next year from 9.5 percent this year. But it will remain the world’s fastest growing economy into next year.
The report said outlook for China would be weaker without its government’s recently announced US$586 billion stimulus program to spur domestic demand.
In South Asia, economic growth is likely to reach 6.1 percent as India reels from direct blows of the global financial crisis on its banking system and financial market.
Growth in India is seen at 6.5 percent next year, down from 7 percent this year.
Emerging East Asia will post 5.7 percent economic growth next year, down from an estimated 6.9 percent this year, the report said. The subregion includes ASEAN, China, Hong Kong, Taiwan and South Korea.
The bank report said the forecasts could be undermined by sharper or prolonged global recession, persistent financial stress with volatile capital flows, further tightening of external and domestic funding, and foreign exchange volatility.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source