The Asian Development Bank yesterday cut its growth forecast next year for the region’s developing economies to 7.6 percent, citing tighter credit and soaring food and energy costs.
The bank trimmed its previous growth forecast from April of 7.8 percent, and said actual growth could be lower if either inflation or the US economic slowdown were worse than expected.
It maintained its growth forecast this year for the region at 7.6 percent, with China set to dip below five years of double-digit growth to 9.9 percent this year and 9.7 percent next year.
However, it sharply raised its inflation forecast for East Asia to 6.3 percent this year, from 5.1 percent in its April outlook. Inflation averaged 3.9 percent in East Asia last year. Vietnam would be the worst off with 19.4 percent inflation this year and 10.2 percent next year.
The bank urged a “more decisive tightening of monetary policies” to fight the scourge of inflation and prevent it eating away the fruits of speedy economic growth.
It said many governments were “behind the curve” on the issue and warned the inflation problem was deepening.
“The risk of inaction is rising, and the region’s monetary authorities need to formulate more forceful and preemptive policy responses,” the ADB said.
While economic growth in developing Asia in the first three months of the year was stronger than expected, it eased in the second quarter as slower growth in industrialized nations began to bite, the bank said.
Growth in the industrialized economies of Hong Kong, South Korea, Singapore and Taiwan would slow to 4.7 percent this year amid weaker demand for their exports, before recovering to 4.9 percent next year, the bank said.
Aggregate economic growth in the other large economies of the ASEAN should ease to 5.5 percent this year, with prospects in Indonesia, Malaysia and the Philippines moderating, it said.
The region’s developing nations should weather the storm “relatively well,” the ADB said, adding that central bankers were faced with a dilemma in trying to keep inflation in check without depressing the economy.
“Rapidly rising inflation threatens to dampen consumer spending and risks a wage-price spiral that could derail the region’s recent solid growth,” the bank said.
BACK IN THE NEIGHBORHOOD: The planned transit by the ‘Baden-Wuerttemberg’ and the ‘Frankfurt am Main’ would be the German Navy’s first passage since 2002 Two German warships are set to pass through the Taiwan Strait in the middle of this month, becoming the first German naval vessels to do so in 22 years, Der Spiegel reported on Saturday. Reuters last month reported that the warships, the frigate Baden-Wuerttemberg and the replenishment ship Frankfurt am Main, were awaiting orders from Berlin to sail the Strait, prompting a rebuke to Germany from Beijing. Der Spiegel cited unspecified sources as saying Beijing would not be formally notified of the German ships’ passage to emphasize that Berlin views the trip as normal. The German Federal Ministry of Defense declined to comment. While
‘REGRETTABLE’: TPP lawmaker Vivian Huang said that ‘we will continue to support Chairman Ko and defend his innocence’ as he was transferred to a detention facility The Taipei District Court yesterday ruled that Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) be detained and held incommunicado over alleged corruption dating to his time as mayor of Taipei. The ruling reversed a decision by the court on Monday morning that Ko be released without bail. After prosecutors on Wednesday appealed the Monday decision, the High Court said that Ko had potentially been “actively involved” in the alleged corruption and ordered the district court to hold a second detention hearing. Ko did not speak to reporters upon his arrival at the district court at about 9:10am yesterday to attend a procedural
Thirty Taiwanese firms, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and ASE Technology Holding Co (日月光投控), yesterday launched a silicon photonics industry alliance, aiming to accelerate the medium’s development and address the energy efficiency of artificial intelligence (AI) devices like data centers. As the world is ushering in a new AI era with tremendous demand for computing power and algorithms, energy consumption is emerging as a critical issue, TSMC vice president of integrated interconnect and packaging business C.K. Hsu (徐國晉) told a media briefing in Taipei. To solve this issue, it is essential to introduce silicon photonics and copackaged optics (CPO)
The High Court yesterday overturned a Taipei District Court decision to release Taiwan People’s Party Chairman Ko Wen-je (柯文哲) and sent the case back to the lower court. The Taipei District Prosecutors’ Office on Saturday questioned Ko amid a probe into alleged corruption involving the Core Pacific City development project during his time as Taipei mayor. Core Pacific City, also known as Living Mall (京華城購物中心), was a shopping mall in Taipei’s Songshan District (松山) that has since been demolished. On Monday, the Taipei District Court granted a second motion by Ko’s attorney to release him without bail, a decision the prosecutors’ office appealed
RSS