Bangkok--15 Dec--UNISBKK
Developing countries across Asia and the Pacific can expect another year of impressive growth in 2007 but should be wary of dangers ahead, says the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). GDP growth in 2007 is currently projected to be a strong 6.9 per cent, only slightly less than the spectacular 7.1 per cent growth in 2006.
Despite the buoyant growth projection for 2007, UNESCAP warns that there are increasing risks for Asia-Pacific countries. "The region can not ignore the perils for growth from a disorderly adjustment in global imbalances or a supply-side oil shock", said UNESCAP Executive Secretary Kim Hak-Su commenting on UNESCAP's year-end report: "Key Economic Developments in Asia and the Pacific 2007".
"The fall of the United States dollar in recent weeks has revived fears in the region of a turbulent adjustment in global imbalances", said Mr Kim Hak-Su. "If there is a disorderly unwinding of global imbalances with a sharp fall in the United States dollar would result in a global recession with severe negative impacts on Asia-Pacific countries".
An oil shock through even a moderate disruption in production capacity or a further escalation of security concerns in the Middle East can raise fuel prices as spare capacity is low, the report advises.
"The rising economic powerhouses of China and India are currently driving the Asia-Pacific region's good economic performance", said Mr. Kim Hak-Su.
Added stimulus has come from the continuing revival of the Japanese economy.
"Japan's revival will help the Asia-Pacific region to counteract the effects of a slowing United States economy," notes Mr. Kim Hak-Su.
One of the key concerns for the region is of possible overheating in the Chinese economy. However, UNESCAP analysis shows that China is witnessing sectoral, rather than generalized overheating. Nevertheless, measures taken by China to cool the economy may significantly affect Asia-Pacific economies.
"If China's GDP growth drops to its trend rate, net exports in developing Asia will decline by 2 percentage points from our baseline forecast", the report cautions.
For more information, please contact:
Mr. David Lazarus, Chief
UN Information Services Bangkok
Tel: (66-2) 288-1861, 62, 66; Fax:
(66-2) 288-1052
Email: [email protected]