Posts Tagged ‘ASEAN’
ADB cuts Asia growth
Asian Development Bank (The Asian Development Bank / ADB) states, developing countries in Asia should move more quickly to minimize the negative impact of slowing world economic growth.
In a recent report released yesterday, ADB lowers growth forecast East Asia next year due to the impact of the euro zone debt crisis that threatens the global economy.
Financial institution based in Manila, the Philippines, these cut the growth in gross domestic product (GDP) next year dropped to 7.2 percent from 7.5 percent previously to 10 ASEAN (the Association of South East Asian Nations) including China, Hong Kong , South Korea, and Taiwan.
ADB officials said the circumstances facing Europe and the United States (U.S.) has the potential to reduce economic growth by 1.2 percent to 4.2 percent for East Asia region including Japan. In fact, the forecast growth in the region previously predicted 5.4 percent.
According to the ADB, the projected decline in growth was mainly due to weak external demand, as well as European debt problems. Many people assessing the crisis in Europe could be a massive financial crisis and the effect on the global economy.
“The worst scenario is the U.S. and the euro zone fell back into a recession that pushed the global economy mired deeper and deeper,” the ADB report said East Asia. ADB states, with movement of the crisis was still in Europe, believed to prospects of economic growth for East Asia including Japan have declined from last September forecast.
According to the ADB, the global economic recovery could be hampered if the euro zone and the U.S. fell back into a recession that caused the global financial crisis to another. Based on ADB’s projections, the economy in the United States (U.S.) and Europe respectively only 2.1 percent and 0.5 percent next year. China’s economy predicted to grow by 8.8 percent in 2012.
Economic growth in the ASEAN region is also much slower than previous estimates. Indonesia’s economic growth is projected to grow only 6.5 percent in 2012. Indonesia’s economy has the potential to slow to 5.5 percent if Europe and the U.S. really in a recession. While Thailand and Japan each only able to grow by 4.5 percent and 2.5 percent next year.
ADB report also stressed yesterday that policy makers respond with decisive and collective efforts in stemming the crisis. In addition, the ADB also warned of downside risks such as protectionism and the instability of capital flows and inflation.
However, the problem of inflation likely ruled out because it was considered to have peaked in most economies without predicting a recession in the region.
Meanwhile, the euro zone if the problem turns into a massive crisis for the global economy, the impact on East Asia will become serious. However, the effect could be addressed if governments to act decisively.
“East Asia must be prepared for a prolonged crisis and slowing pascapemulihan crisis by implementing a long-term structural reforms,” ??the report said.
According to the ADB, one of the ways you can do is remain consistent in managing government spending to help maintain the growth momentum. As for central banks, each country must quickly manage its monetary policy tools to maintain inflation.
Meanwhile, the International Monetary Fund (International Monetary Fund / IMF) has predicted that Indonesia’s economy could only grow in the range of 6.3 percent next year. This prediction is below the government set a target of economic growth target of 6.5 percent.
IMF chief representative in Indonesia Milan Zavadjil say, the high level of consumption is still the backbone of Indonesian economy. Finance Minister Agus Martowardojo said the negative impact of the crisis makes the demand and consumption decline. According to him, the world economy is still haunted by the financial crisis in developed countries.
“High public debt they complicate public spending, the decline in consumption, and investment the state will affect consumption, as well as global investment,” said Finance Minister