Developing Asia's economic growth should continue at robust rates of 7% or more for 2006 and 2007 despite high oil prices as major industrial economies recover, boosting the region's exports, the Asian Development Bank said April 6. Economic prospects should remain "broadly favorable" as major industrial economies grow close to their potential, with global trade also expanding at its historical average as the electronics cycle continues its 2005 upswing, the ADB's annual Asian Development Outlook report for 2006 said.
Against this backdrop, and despite marginally tighter interest rates and high oil prices, "aggregate growth in 2006 is expected to soften a little to 7.2% (from 7.4% in 2005) and by some more in 2007 to 7%," it added. "By historical standards, these growth rates in developing Asia are robust."
China's growth should come in at 9.5% this year, moderating to 8.8% in 2007. India should also ease to 7.6% and 7.8% this year and next after 8.1% last year. Southeast Asia's outlook will see little change, at 5.5% and 5.7% compared to 5.5% last year, as Indonesia grapples with high interest rates, while Malaysia and Thailand would rely on state investment programs while reaping benefits from the electronics upswing.
Net oil-exporting Central Asia should continue to enjoy double-digit economic growth this year amid high oil prices.
Azerbaijan, one of the world's fastest-growing economies last year, has a healthy momentum with new investments in oil and gas fields as well as export pipelines.
Asia as a whole should continue to run a substantial current account surplus over the next two years. "A narrowing current account surplus suggests that, on average, domestic demand will play a more important role in supporting growth in developing Asia in 2006 and 2007," the report said.
Copyright Agence France-Presse, 2006