A new report by the Asian Development Bank (ADB) forecasts a robust 8.2% GDP growth for Asia in 2010, far stronger than the 5.4% recorded in 2009. The revised estimate is also above the ADB’s earlier forecast of 7.5%, which was made in April.
ADB Report: Asia's GDP to Grow Faster than Forecast
The bank credits strong export recovery, robust private demand, and the sustained effects of stimulus policies for the region’s solid growth in the first half of 2010. It expects the improved and broad-based performance to carry on for the rest of the year.
Much of Asia’s strong growth came from China and India. The ADB kept its forecast of China’s GDP growth at 9.6% this year, the same as in April, but upgraded India’s growth to 8.5%, from 8.2% originally.
Aggregate growth in the five economies of East Asia is now projected to rise to 8.6% in 2010, largely on the back of stronger than forecast economic recovery in Hong Kong, South Korea and Taiwan. Meanwhile, the aggregate economy of the ten-nation ASEAN is predicted to expand by 7.4% this year, powered by strong exports in Malaysia, Singapore and Thailand and investment and consumption in Indonesia, Philippines and Vietnam.
“Developing Asia’s recovery has led the world,” says ADB Chief Economist Jong-Wha Lee. “The speed and strength of the region's rebound continues to surprise on the upside.” He adds: “The V-shaped recovery has laid the foundation for sustained growth beyond the short term.”
The one big cloud hanging over the region’s otherwise sunny short-term horizon is the continued fragility and uncertainty of recovery in the industrialised countries, says the ADB. While these countries have performed better than expected in the first quarter, their growth momentum slowed down noticeably in the second quarter.
The threat of another contraction in industrialised countries still remains, although the likelihood is small, the bank concludes.
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