Arab Today, arab today as growth falters analysts ask has asia lost its mojo
Last Updated : GMT 16:24:37
Arab Today, arab today
Arab Today, arab today

As growth falters, analysts ask has Asia lost its mojo

Arab Today, arab today

Arab Today, arab today As growth falters, analysts ask has Asia lost its mojo

Hong Kong - AFP

First the IMF warned developing Asia to brace for shocks from the West. Then the Asian Development Bank slashed its regional growth forecasts. Now analysts are asking, has Asia lost its mojo? The European debt crisis and weakness in the United States have long been drags on Asian growth, but throw in China's difficult leadership transition and the outlook is grim. "It wasn't supposed to turn out like this. Growth in recent months has faltered again, confounding expectations of a gradual recovery," HSBC economists Qu Hongbin and Frederic Neumann wrote in a report released last week. "China is one culprit, though a wobbly West is equally to blame." As Asia's powerhouses China and India slow faster than many had expected, the ADB last Wednesday revised down its growth estimates for the region's emerging economies to the lowest level since 2009. Echoing assessments from the International Monetary Fund, the bank also warned of significant risks arising from the eurozone and the uncertain recovery in America, both of which are major export markets for Asian manufacturers. "Developing Asia is slowing down much more than we expected," ADB chief economist Changyong Rhee told reporters in Hong Kong. "The years of two-digit growth in Asia are coming to an end." The bank cut its 2012 growth forecast for developing Asia, which comprises 45 nations, from 6.9 percent in April to 6.1 percent -- the lowest since 2009 when the region expanded 6.0 percent. It also revised downward the 7.3 percent growth outlook for 2013 to 6.7 percent. The region expanded 7.2 percent in 2011. China's gross domestic product (GDP) was seen expanding 7.7 percent this year -- slow by the country's recent standards -- before bouncing back to 8.1 percent in 2013, still well below the 9.3 percent achieved last year. The Manila-based lender said India would see GDP growth slow to 5.6 percent in 2012 before picking up to 6.7 percent next year. Analysts are wondering when will China crack the whip and provide the policy stimulus its economy needs to avoid a hard landing. HSBC economists Qu and Neumann said they had expected Beijing to act sooner. "China has held back in providing a determined stimulus, with obvious implications for economic growth regionally," the economists wrote. Domestic politics may be one reason Beijing seems unwilling or unable to use its fiscal reserves to boost growth, with the Communist Party leadership on the verge of a once-a-decade power shift that has been clouded by controversy. "Given that growth is highly investment driven, supported especially by the public sector, any leadership change is bound to have a large impact on activity," Qu and Neumann said. "This year, more so than during other transitions, political uncertainty may have had an especially restraining effect on investment decisions." Asia's worsening outlook is likely to be underlined when the IMF provides an update on the global economy in a twice-yearly report on Tuesday, in the run-up to weekend meetings of finance ministers from around the world in Tokyo. But is it time to hit the panic buttons? Has Asia really lost its economic vim? Some analysts say no. "Asia hasn't quite lost its mojo yet, but patience is needed before growth accelerates to more accustomed speed," Qu and Neumann said, predicting China would loosen policy early next year when the new leadership is in place. Rhee agreed that there is no need for panic. "This is a natural adjustment to a more sustainable growth pace," he said of the outlook for developing Asia. Of all the regions in the world that are struggling to cope with the fallout from Europe and the United States, Asia has the most ammunition in its policy armoury to respond, research consultancy Capital Economics said Friday. "Asia has significant scope to loosen both monetary and fiscal policy," it said. "Unlike in most of the developed world, interest rates are well above zero across Asia, meaning there is room for interest rates to be cut in most countries." ANZ bank said in an analysis last week that while growth in China and India was on the slide, the core economies of Southeast Asia were proving remarkably resilient. It noted that while the rest of Asia had "re-linked" with the West -- with domestic demand tracking weak external demand for exports -- this was not the case in Southeast Asia's biggest developing economies. "This has broken down entirely in ASEAN (Association of Southeast Asian Nations) over the past few quarters with domestic demand and foreign demand now largely uncorrelated," the ANZ report said. This meant that Asian economies such as Indonesia, Malaysia, Thailand and Vietnam would "likely hold up well" if the global economy slowed further.  

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today as growth falters analysts ask has asia lost its mojo Arab Today, arab today as growth falters analysts ask has asia lost its mojo

 



Arab Today, arab today

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today as growth falters analysts ask has asia lost its mojo Arab Today, arab today as growth falters analysts ask has asia lost its mojo

 



Arab Today, arab today Etiquette expert calls for short visits

GMT 16:21 2017 Monday ,26 June

Etiquette expert calls for short visits
Arab Today, arab today France defies terrorism through tourism

GMT 15:18 2017 Saturday ,20 May

France defies terrorism through tourism
Arab Today, arab today Mai Al-Jeddawi presents décor ideas for Ramadan
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today

GMT 09:49 2017 Tuesday ,02 May

Girl barred from Malaysia chess competition

GMT 08:48 2017 Saturday ,06 May

Climate science: Bad news gets worse

GMT 16:25 2017 Sunday ,04 June

“Suhoor” is basic meal for fasting

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons

GMT 11:09 2017 Sunday ,25 June

HUAWEI P10 the ‘guru’ of portrait shots
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday