GDP of Asia-Pacific developing economies set to grow 5.4% this year

KUALA LUMPUR: The average gross domestic product (GDP) of developing economies in the Asia-Pacific is expected to grow by 5.4% in 2017, mainly driven by domestic private consumption, says the United Nations (UN) .

In the year-end update of the flagship report themed, “Economic and Social Survey for Asia and the Pacific 2017”, it said domestic private consumption would be facilitated by relatively low inflation, low interest rates and robust consumer confidence.

“Stronger exports also contributed to the recent uptick in the region’s economic growth,” the UN said in the report released by its Economic and Social Commission for Asia and the Pacific (ESCAP) yesterday.

The report, however, cautioned that while the regional economic outlook for 2018 is broadly stable, underpinned by growing domestic and intraregional demand, private investments remained weak in most countries.

“This is partly the result of overcapacity and a debt overhang in the corporate and banking sectors of some major economies,” it said.

To achieve a stable and sustained economic growth momentum, the report said higher wages supported by productivity gains and revival of private investment would be need- ed.

Additionally, the report noted that countries in the region could improve their governance and fiscal management by effectively leveraging technology.

“For instance, through the use of technology, governments can improve tax administration and compliance and implementation of direct benefit transfers, while improving public expenditure efficiency,” it said.