Asia-Pacific region set to enjoy strong growth, but perils ahead, warns UN forecast
In its annual forecast, the UN Economic and Social Commission in Asia and the Pacific (UNESCAP) projects the region will enjoy 6.9 per cent growth in gross domestic product (GDP) next year, just shy of the 7.1 per cent growth of 2006.
UNESCAP Executive Secretary Kim Hak-Su credits the end of deflation in Japan as confirmation that the country’s economy, which has struggled for more than a decade, is recovering.
“The Japanese revival has created significant export opportunities for other Asian economies,” he said, adding that to ensure a sustainable economic recovery, the Japanese Government still has to tackle the country’s high domestic debt.
“Any disruption to fiscal consolidation could negatively affect consumer confidence and spending and, in turn, would threaten the Japanese recovery.”
The report indicates that Singapore, Indonesia, Thailand and China stand to gain the most from rising exports if Japanese consumption starts increasing at the same rate as it did in the late 1980s.
But Mr. Kim warned that perils lies ahead for the region, particularly if there is a significant disruption in oil production or problems arising from a falling United States dollar.
“If there is a disorderly unwinding of global imbalances with a sharp fall in the United States dollar, [it] would result in a global recession with severe negative impacts on Asia-Pacific countries.”