'Most Asian countries to grow faster in '06: ADB
A robust first half suggests developing Asian countries will record an average 7.5 per cent growth this year, surpassing the 7.2 per cent performance in 2005, the Asian Development Bank said on Tuesday.
Average growth will decelerate to a still-respectable 6.9 per cent in 2007, as the economies of China, the United States and Japan slow down, the Manila-based ADB added.
"Through the first half of 2006, the region continued to adjust admirably to higher energy costs, persistent inflationary pressures, tighter monetary conditions and increased financial volatility," the ADB said in a report on the region's economies over the first half.
Additionally, there had been a "revival of external demand" with several countries also boosted by strong domestic demand.
China was forecast to grow 10.1 per cent in 2006 and 9.0 per cent in 2007 compared to 9.9 percent last year, the bank said.
Hong Kong, Taiwan and South Korea would grow 5.1 percent and 4.7 per cent in 2006 and 2007 respectively compared to 4.5 per cent in 2005, the ADB added.
Association of Southeast Asian Nations (ASEAN) members were forecast to grow 5.5 and 5.7 percent in 2006 and 2007 after 5.5 per cent in 2005.
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The outlook for China is "key to the region's strong growth prospects," the ADB said, remarking that stronger Chinese imports would "provide sustained support to the rest of the region."
Growth in ASEAN will pick up in 2007 based on "country-specific factors," such as a recovery in Indonesia, strong remittances from overseas workers to the Philippines and reduced political uncertainty in Thailand, the ADB added.
However the bank warned that there would likely be higher inflation in the region, picking up to 3.5 per cent in 2006 from 3.0 per cent in 2005.
China will see inflation rise to 2.3 per cent this year from 1.8 per cent while Hong Kong, Taiwan and South Korea will see prices increase 2.6 per cent this year after 2.4 per cent last year.
For the ASEAN countries alone, prices are expected to rise 7.3 per cent this year, up from 6.3 per cent in 2005.
The ADB warned that its positive estimates were "contingent on the assumption that no adverse shocks occur" in the near future.
Among the risks was a possible "sharp fall in external demand," a possible overheating of the Chinese economy, higher-than-expected energy prices and "a significant deterioration in global financial conditions."