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The Asian Development Bank forecasts Stable Growth for Asian Economies

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The Deputy Chief Economist of the Asian Development Bank has presented this morning the annual report of this financial institution at Casa Asia.

Asian economies will maintain a stable growth rhythm during the next two years, thanks to the perspectives of improvement of developed countries and to the moderate growth of the People's Republic of China. The Deputy Chief Economist of the Asian Development Bank, Dr. Zhuang Juzhong has stated this today at Casa Asia, within the framework of the presentation of the economic report "Asia Development Outlook" (ADO 2014), published by this multilateral institution every year based in Manila. Dr. Zhuang has been accompanied by Miquel Nadal, economist and former Vice Minister of Foreign Affairs, Mariano Payá, Territorial Trade Director of ICEX in Catalonia, and Ramón Mª Moreno, Director General of Casa Asia.

Two broad trends shape the outlook, according to Dr. Zhuang. On the one hand demand for Asia’s output is expected to grow as the recovery in the major industrial economies gains momentum. In this sense, Zhuang has stated that combined GDP growth in the United States, the euro area, and Japan is expected to pick up to 1.9% in 2014 from 1.0% in 2013 before strengthening further to 2.2% in 2015.

On the other hand, the improvement in demand will be offset somewhat by moderating growth in the PRC where the economy slowed to 7.7% in 2013 for a combination of factors, among others, Zhuang has mentioned impacts from tightened credit growth, pared industrial overcapacity, deepening local government debt or rising wages.

ADB’s flagship annual economic publication, Asian Development Outlook 2014 (ADO), forecasts developing Asia will achieve gross domestic product (GDP) growth of 6.2% in 2014, and 6.4% in 2015. The region grew 6.1% in 2013. On the other hand, China, second world economy, will grow 7.5% in 2014 (two tenths below 2013) and 7.4% in 2015, whereas India will go from 5.55 in 2014 to 6% in 2015. Southeast Asia will grow 5% in 2014 and 5.4% in 2015.

Dr. Zhuang also stated that risks to carry out these forecasts have been reduced in comparison to previous years and he has insisted on the fact that Asian countries "must continue making efforts to apply solid macroeconomic policies and necessary structural reforms".

The The Deputy Chief Economist of ADB has also affirmed that the accelerated growth of emerging economies in the last years has caused inequalities in Asia which is why "fiscal policies need to be applied in order to mend these disparities and to favour a more inclusive growth".

Dr Zhuang has highlighted the three areas that warrant close monitoring. First, if efforts in PRC to curb credit expansion are too abrupt and excessively undermine growth, a deeper slowdown could drag down prospects for its trade partners. Second, data on the recovery in the major industrial economies have been mixed; pointing to the possibility that demand for the region’s goods from these countries may be softer than envisaged. And third, a further shock to global financial markets from changes in US monetary policy cannot be ruled out, Zhuang has concluded.

Asian Devolopment Outlook (ADO) is considered an international reference regarding Asian macroeconomics. It analyses economic tendencies and projections for global economy and specifically for Asian economies. In addition, it addes an assessment of economic policies applied to the aforementioned geographic framework and a thematic chapter devoted to fiscal policy. This year ADO is presented in Hong Kong, Berlin, Oslo, Madrid and Barcelona.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration.


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