Economic growth in developing nations in the Asia-Pacific region will fall slightly this year to 7.7 percent, the UN said yesterday, but buoyed by booming India and China, it will likely weather a slowdown in the US.
The region is entering a phase of "heightened uncertainty," the UN report said, with export-led countries to be hardest hit by the ongoing financial turmoil in the US.
"In the worst case scenario of a recession in the US and a deeper depreciation of the dollar, the impact in much of the region would be harsh," the report said.
"Most vulnerable will be the exporters of high-technology products, such as electronics, to the US: Singapore, South Korea and Taiwan," said the report outlining the economic and social situation for the region for this year.
After a record GDP growth of 8.2 percent last year, global factors including high oil and food prices prices would take a toll in the region, the report by the UN Economic and Social Commission for Asia and the Pacific (ESCAP) said.
Rich countries in the region including Japan, Australia and New Zealand will see growth drop to 1.6 percent this year from 2 percent last year, it said.
But China and India's economies would continue chugging along, offering opportunities to other export-led economies.
India is expected to maintain growth at 9 percent this year while in China, government spending increases will spur domestic demand.
"China and India, the region's growth locomotives, are expected to grow at a robust pace, boosting growth in the region," ESCAP deputy executive secretary Shigeru Mochida said.
"So far the Asia Pacific region has been resilient -- it is mainly due to the good and strong economic fundamentals," he told reporters at the Bangkok launch of their report.
Maintaining these fundamentals by moderating inflation and keeping budget deficits and interest rates low was key to weathering turmoil in the world's largest economy, sparked by the housing crisis and credit crunch, he said.
Exporters would face a double whammy of a weakening dollar due to sharply lowered interest rates in the US, as well as slowing demand.
Inflation, meanwhile, is projected at 4.6 percent this year in developing nations, down from 5.1 percent the previous year.
Soaring food prices were a major concern, UN officials said, while agriculture was in need of drastic reform, with government neglect of the sector helping keep 641 million people in the region in poverty.
"Something must be very wrong in the current approach to development if it leaves millions of people in extreme poverty, when so much prosperity has been generated in such a short time," Mochida said.
But even with the credit crunch casting a pall over export-led economies, the financial turmoil is also throwing up opportunities.
"Interest in Asia-Pacific assets may increase because of the strong growth projections for the region," the ESCAP report said.
In addition, sovereign wealth funds in the region are increasingly being tapped to help bolster weakened banks in the US and Europe.
The report also said the region's corporations, being "cash rich and not highly leveraged" have been largely resilient to the US credit crunch.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
RSS