East Asia’s emerging economies are rebounding from the global recession faster than anticipated, the Asian Development Bank (ADB) said yesterday as it raised growth forecasts for the region.
The Manila-based lender said it expects growth of 4.2 percent this year and 6.8 percent next year. That’s up from the bank’s earlier forecasts of 3.6 percent and 6.5 percent. Emerging East Asia comprises 10 Southeast Asian countries plus China, Hong Kong, South Korea and Taiwan.
The recovery has been aided by government stimulus spending and improving exports, though the pace of the rebound varies widely, the ADB said.
Less open economies in Southeast Asia were partly insulated from the global crisis but are not expected to recover strongly either, it said.
China, buoyed by massive stimulus spending and easy credit, recorded by far the strongest recovery, growing 8.9 percent in the third quarter. The ADB maintained its growth forecast for China at 8.2 percent this year and 8.9 percent next year.
Middle-income Southeast Asian economies — Indonesia, Malaysia, the Philippines, Thailand and Vietnam — expanded 1.2 percent in the third quarter.
The combined gross domestic product of newly industrialized nations Hong Kong, South Korea, Singapore and Taiwan contracted slightly by 0.1 percent — a turnaround from the 6.3 percent contraction in the first quarter of this year.
“Emerging Asia is rebounding strongly and growth rates next year are likely to slightly outpace 2008 in most countries,” said Lee Jong-wha, the ADB’s chief economist.
Despite the recovery, Lee said it was essential that “fiscal and monetary stimulus remain accommodative where possible to put economies on a sound footing.”
“A key challenge for each economy will be to carefully time when best to roll back the stimulus to ensure sustained recovery but avoid both excessive inflation and hefty fiscal shortfalls,” he said.
The bank said it expects 45 developing countries from central Asia to the Pacific to grow by 4.5 percent this year and 6.6 percent next year — an increase from the 3.9 percent and 6.4 percent it forecast in September.
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