China, Singapore growth likely to slow down
Manila, August 10:
East Asian countries, including China and South Korea, are expected to witness a moderate slowdown in economic growth this year due to less favourable economic conditions and volatile oil prices, an ADB report states.
“East Asia is expected to experience a moderate slowdown in economic growth this year with the external environment turning somewhat less favourable and oil prices reaching record levels,” according to the multilateral body’s latest Asia Economic Monitor (AEM) report released today.
Current forecasts for East Asia — defined as the 10 Association of Southeast Asian Nations (ASEAN) member countries, China and South Korea are expected to see a slowdown in economic growth from 7.6 per cent in 2004 to 6.8 per cent this year. “Excluding China, East Asia is expected to post average growth of 4.4 per cent, compared with 2004 growth of 5.5 per cent,” it states.
China had recorded GDP growth of 9.4 per cent in the first quarter of 2005, and 9.5 per cent in the second quarter. “A gradual softening of fixed investment, already underway, and somewhat diminished export prospects are expected to slow growth in the coming quarters,” according to the AEM. “We now face a backdrop of moderately slowing growth, a gradual build-up of inflationary pressures, and a tightening of the US monetary policy,” said Pradumna B Rana, senior director of ADB’s Office of Regional Economic Integration (OREI) in a statement.
“The key challenge for East Asia is to calibrate fiscal, monetary, and exchange rate policies while at the same time pursuing structural reforms to strengthen domestic demand,” Rana said.