The Asian Development Bank (ADB) raised its regional growth forecast this year from 6.6 percent to 7.5 percent yesterday, but warned that governments need to adjust policies to avoid shocks that could hamper their recovery.
China is forecast to grow by 9.6 percent, after last year’s 8.7 percent expansion almost singlehandedly lifted the region’s overall growth to 5.9 percent, offsetting weakness elsewhere. Another powerhouse, India, is projected to see growth rise to 8.2 percent from last year’s 7.2 percent.
Five Southeast Asian economies that contracted last year — Malaysia, Singapore, Thailand, Cambodia and Brunei — are also set to return to growth, together with Taiwan, Hong Kong and Mongolia, the bank said in its economic outlook.
Next year, GDP growth across the region is seen easing back to 7.3 percent.
Investment is expected to remain strong and private consumption improve as projected growth this year and next lifts domestic demand, boosting consumer price inflation to about 4 percent, the bank said.
The fragile recovery could still be derailed by a premature withdrawal of stimulus, a sharp rise in commodity prices, persistent global financial imbalances and deteriorating debt positions in some countries, ADB President Haruhiko Kuroda said.
Asia’s recovery is attracting large capital flows, the perils of which were made clear in the 1997-1998 Asian financial crisis, he said.
“Volatile capital flows could again have serious implications for exchange rates and money supply,” Kuroda said.
“As it exits the worst effects of this crisis, therefore, developing Asia must remain faithful to its tradition of sound and responsible fiscal and monetary policies,” he said.
The bank proposed monetary, exchange rate and fiscal policies to enable the region to adapt to the post-crisis world. It said that while price stability is the overriding objective, there needs to be better coordination between fiscal regulation and monetary policy to avert a homegrown financial crisis.
“After all, the combination of lax monetary policy and inadequate financial regulation contributed to inflating the US housing market bubble that the immediate catalyst of the global financial crisis,” the bank said.
Excessive foreign exchange market intervention should be reduced in favor of greater flexibility and capital controls could help guard against foreign exchange volatility, it said.
WAITING GAME: The US has so far only offered a ‘best rate tariff,’ which officials assume is about 15 percent, the same as Japan, a person familiar with the matter said Taiwan and the US have completed “technical consultations” regarding tariffs and a finalized rate is expected to be released soon, Executive Yuan spokeswoman Michelle Lee (李慧芝) told a news conference yesterday, as a 90-day pause on US President Donald Trump’s “reciprocal” tariffs is set to expire today. The two countries have reached a “certain degree of consensus” on issues such as tariffs, nontariff trade barriers, trade facilitation, supply chain resilience and economic security, Lee said. They also discussed opportunities for cooperation, investment and procurement, she said. A joint statement is still being negotiated and would be released once the US government has made
NEW GEAR: On top of the new Tien Kung IV air defense missiles, the military is expected to place orders for a new combat vehicle next year for delivery in 2028 Mass production of Tien Kung IV (Sky Bow IV) missiles is expected to start next year, with plans to order 122 pods, the Ministry of National Defense’s (MND) latest list of regulated military material showed. The document said that the armed forces would obtain 46 pods of the air defense missiles next year and 76 pods the year after that. The Tien Kung IV is designed to intercept cruise missiles and ballistic missiles to an altitude of 70km, compared with the 60km maximum altitude achieved by the Missile Segment Enhancement variant of PAC-3 systems. A defense source said yesterday that the number of
‘CRUDE’: The potential countermeasure is in response to South Africa renaming Taiwan’s representative offices and the insistence that it move out of Pretoria Taiwan is considering banning exports of semiconductors to South Africa after the latter unilaterally downgraded and changed the names of Taiwan’s two representative offices, the Ministry of Foreign Affairs (MOFA) said yesterday. On Monday last week, the South African Department of International Relations and Cooperation unilaterally released a statement saying that, as of April 1, the Taipei Liaison Offices in Pretoria and Cape Town had been renamed the “Taipei Commercial Office in Johannesburg” and the “Taipei Commercial Office in Cape Town.” Citing UN General Assembly Resolution 2758, it said that South Africa “recognizes the People’s Republic of China (PRC) as the sole
Taiwanese exports to the US are to be subject to a 20 percent tariff starting on Thursday next week, according to an executive order signed by US President Donald Trump yesterday. The 20 percent levy was the same as the tariffs imposed on Vietnam, Sri Lanka and Bangladesh by Trump. It was higher than the tariffs imposed on Japan, South Korea and the EU (15 percent), as well as those on the Philippines (19 percent). A Taiwan official with knowledge of the matter said it is a "phased" tariff rate, and negotiations would continue. "Once negotiations conclude, Taiwan will obtain a better
RSS