Asia growth outlook ‘brightens’
manila — The Asian Development Bank raised its 2017 and 2018 growth forecasts for the region, reflecting rising exports as manufacturers of smartphones to cars to other consumer goods benefited from improving global demand.
Developing Asia — made up of 45 countries in the Asia-Pacific region — is expected to grow 5.9 per cent and 5.8 per cent this year and next, the Manila-based ADB said in the update of its Asian Development Outlook on Thursday.
They are a step up from April forecasts of 5.7 per cent for both years. An upturn in global demand since late last year has given tradedependent Asian economies much needed momentum, with the United States and Europe also showing improving growth.
The update of the Development Outlook raised China’s 2017 and 2018 growth forecasts to 6.7 per cent and 6.4 per cent, respectively, from 6.5 per cent and 6.2 per cent, driven by strong consumption and improving shipments.
China’s economy beat expectations with 6.9 per cent growth in the second quarter, in part driven by firmer exports and production, which could heighten trade tensions as the United States and Beijing begin economic talks on Wednesday.
“Despite lingering uncertainties surrounding the strength of the global recovery, we feel that the region’s economies are well-placed to face potential shocks to the outlook,” Yasuyuki Sawada, ADB’s chief economist, said in a statement.
Inflation across the region is expected to remain under control, helped by well-behaved food and fuel prices, the ADB said. It cut this year’s inflation projection to 2.6 per cent from 3.0 per cent, and next year’s forecast to 3.0 per cent from 3.2 per cent.
Japan’s export growth
Meanwhile, Japan’s exports rose for a seventh straight month in June led by shipments of cars and electronics, an indication external demand continues to support a gradual economic recovery and backing the central bank’s upbeat economic view.
Ministry of Finance (MOF) data showed on Thursday that exports grew 9.7 per cent year-on-year in June, versus a 9.5 per cent annual gain expected by economists in a Reuters poll. It followed a 14.9 per cent year-on-year rise in the previous month.
Some analysts say net exports — or exports minus imports — may have trimmed gross domestic product growth in the April-June period as the pace of export growth likely slowed from the previous quarter while imports surged.
Japan’s economy grew at an annualised 1.0 per cent at the start of this year, posting a fifth straight quarter of growth. Whether it can extend gains depends on the strength of domestic demand, which has been a soft spot in the world’s third largest economy, they say.—