Latest Stories

ADB warns of risks to developing Asia’s rebound

HONG KONG  — Economic growth in developing Asia is picking up, underpinned by China’s rebound and strength in countries such as Indonesia, the Asian Development Bank said in a report Tuesday, while warning that political disputes pose an increased threat to growth.


The Manila-based lender’s 2013 Asian Development Outlook said some big dangers to regional growth have faded, such as the possibility of the euro common currency breaking up or a “US fiscal shock” stemming from brinkmanship over the debt ceiling in the world’s biggest economy.

But it said that “political risks are emerging as the main threats to the region’s continued robust growth.” Political disputes are “calling into question the ability of authorities to find compromise solutions to nagging fiscal problems in the US, deepening austerity fatigue in the euro area and simmering border disputes in Asia.”

Over the past year, several Asia nations have been roiled by territorial disputes, including a high-profile row between China and Japan over disputed islands in the East China Sea.

The ADB said developing Asia, which includes giant emerging economies such as China, India and Indonesia, will expand 6.6 percent this year, unchanged from its previous forecast in December. Growth is forecast to inch higher to 6.7 percent in 2014. The region grew 6.1 percent in 2012,

Developing Asia includes 45 developing or newly industrialized countries in Asia and the Pacific but excludes Japan.

The ADB said inflation would tick higher but would be kept in check, with consumer prices rising by 4 percent this year and 4.2 percent in 2014, up from 3.7 percent in 2012. The report warned policymakers to keep an eye on rising prices because as growing factory output eliminates slack in production capacity, “loose monetary policy risks reigniting inflation.”

China’s economy, the world’s second biggest, will expand 8.2 percent this year after growing 7.8 percent in 2012, driven by strong domestic consumption and investment. The forecasts are both 0.1 percentage point higher than the ADB’s December prediction.

China is rebounding from its deepest slump since the 2008 global crisis though analysts warn recovery will be shaky. China’s growth rate will ease to 8 percent in 2014 as authorities bring in policies aimed at reducing pollution and reducing the gap between rich and poor, the ADB said.

Southeast Asia, the only region covered in the report that didn’t slow last year, will maintain its growth rate as robust private consumption and investment outweigh softer demand for exports. Indonesia will expand about 6.5 percent in each of the next two years while the Philippines will grow about 6 percent.

India, the region’s other giant, will expand 6 percent this year and 6.5 percent next year, the report said, but warned that the country risks being held back by structural and policy issues that hamper investment.

In contrast, the developed economies of the US, Japan and the 17 nations the use the euro will eke out a 1 percent expansion this year, rising to 1.9 percent in 2014.

The ADB also warned that Asia needs to secure enough clean and cheap energy to support long-term growth. With developing Asia’s share of global energy use forecast to grow from barely a third in 2010 to more than half by 2035, the region, which has plenty of coal but relatively little oil and natural gas, may be hard pressed to meet its demands.

“With insufficient energy, developing Asia would need to scale back its growth ambitions,” said the report, which recommended curbing general energy subsidies in favor of targeted ones, tapping cleaner energy sources such as wind, solar and biofuels, and integrating gas and electricity networks to create a regional market.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Asian development bank , Business , economy , News

  • carlcid

    The biggest threat to the Philippine economy remains hot money. If left unchecked, the consequences can be messy.

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Luzon grid power reserve ‘enough’ for Holy Week
  • Pimentel proposes incentives for companies that will hire ex-convicts
  • State seeks guilty verdict for Abalos
  • SBMA execs, 2 others face graft raps
  • Pangasinan beachgoers warned vs jellyfish
  • Sports

  • My ideal weight is 140, declares Pacquiao
  • Freddie Roach: I’m satisfied; Manny Pacquiao did well
  • New-look Azkals tie Qatari side
  • San Miguel Beermen eye No. 2 slot, battle Air21 Express
  • Filipinos yield to Iraqis anew Asian club volley
  • Lifestyle

  • Celebrate Easter Sunday at Buddha-Bar Manila
  • Moriones feast: A slow, steady transformation
  • Weaving ‘palaspas’ a tradition kept alive in Tayabas City
  • Finalists announced for best translated books
  • Summer treat for your aspiring astronomers
  • Entertainment

  • Miley Cyrus hospitalized, cancels US concert
  • Otaku Summer Jam 2014: Summer’s hottest J-rock/Cosplay event
  • 2NE1 returns to Manila with “All Or Nothing” Tour
  • Gary Valenciano just keeps moving
  • Noisy celeb spews venom, backs off when confronted
  • Business

  • Longer TRO sought on rate hike
  • Make a stylish statement with the all-new Yaris
  • Hearing set in Olarte case
  • BOC sues steel importers
  • BIR continues to miss collection target
  • Technology

  • Tech company: change passwords or suffer ‘Heartbleed’
  • Filling the digital talent gap
  • SSS to shut down website for Holy Week
  • Another reason to quit social media this Holy Week: your safety
  • Philippines may watch ‘blood moon’ online
  • Opinion

  • We may never know
  • Couple of things
  • Mommy D’s magic
  • Stop bizarre and bloody Good Friday rituals
  • Holy Week taboos
  • Global Nation

  • No travel restrictions to Middle East amid MERS-CoV scare
  • Measures set against entry of MERS-CoV
  • Japan backs PH in case before UN
  • Las Vegas union starts pickets over wages, benefits
  • Fil-Am Daly City councilor has eye on Superior Court seat
  • Marketplace