The economic outlook in the developing nations of Asia is on course for rock-solid growth over the course of the next decade, which although not quite on par with the speed of economic expansion prior to the global financial crisis should still result in growth of between 6% and 7% every year.
According to chief economist of the Asian Development Bank Changyong Rhee, the country region which includes India, Indonesia, China and Thailand has hit a ‘new trend’ that’s here to stay.
After a period of relatively tepid growth in 2012, which saw the region as a whole increase to the tune of 6.1%, the economy of developing Asia is expected to once again increase its speed of growth to 6.6% for 2013 and up to 6.7% in 2014, the bank reports.
“The era of double-digit growth is over,” according to Mr. Rhee, though he did go on to discuss the way in which the Eurozone is by rights likely to be stuck in the midst of its debt crisis for some time to come, while the US economy is beginning to display improvement. The global situation is one that highlights just how stable the current growth trend in developing Asia is on a comparative basis – growth that really didn’t hit its stride until the latter half of last year.
Mr. Rhee stated that the southeast Asian economies’ remarkable resistance coupled with explosive growth in China take majority credit for the region’s growing strength, having reduced regional dependency on international economies and brought about a boom in international trade and domestic consumption.
However, while the picture as a whole for developing Asia is a positive one, growth across the region will vary significantly. For example, China is expected to grow as much as 8%, while the likes of Thailand and Malaysia will be more likely to grow 5% – Singapore and Hong Kong by contrast with significantly more developed economies already are looking at a figure closer to 3% growth.
In addition, there are also significant global pressures weighing heavy on the future economic strength and growth of developing Asia. The ongoing inability by Eurozone leaders to implement austerity measures is one such examples highlighted by the bank, along with continual border disputes across Asia.
In addition, the Asian Development Bank warned that Asia as a whole is heading down a ‘dangerous’ and unsustainable road in terms of its energy demands which according to Mr. Rhee could spell serious environmental disaster for the future.
“Asia could be consuming more than half the world’s energy supply by 2035, and without radical changes carbon dioxide emissions will double,” he warned this week. “Asia must both contain rising demand and explore cleaner energy options, which will require creativity and resolve, with policymakers having to grapple with politically difficult issues like fuel subsidies and regional energy market integration.”