'Asia faces slump risks in '07'
In its semi-annual outlook on global economy, APREO warns about potential pitfalls in the US economy.india Updated: Sep 18, 2006 20:09 IST
Asian economic growth faces increased risks next year, including a likely slowdown in the US economy, although the region will probably emerge largely unscathed amid strong growth in China and India, the IMF said on Saturday.
The IMF's Asia and Pacific Regional Economic Outlook cited "an abrupt slowdown in the US economy, higher oil prices, and increased risk aversion toward emerging markets" as potential pitfalls.
Growth in the region, including Australia and New Zealand, will slow to about 7 per cent in 2007 from an expected 7.25 per cent this year. Still, that's about 0.5 per cent point higher than previously predicted.
"Growth in China and India is set to remain very rapid this year and next, driven by strong domestic demand," the outlook said.
The report also forecast that expected weaker growth in the US, Japan and the economies using the euro is unlikely to undermine the region's exports.
"Most countries in Asia will likely see only a mild slowdown in export growth, reflecting in part the growing importance of intra-regional trade," the report said.
On Thursday, the IMF released its semi-annual outlook on the global economy, in which, it said that emerging economies in Asia, which includes such countries as China, South Korea, Taiwan, Singapore and Indonesia - will expand.