Floods, global doom hit Asia-Pacific economies

Floods hit Thailand , Cambodia, Laos, the Philippines and Vietnam.
In the Economic and Social Survey of Asia and the Pacific 2011: Year-end Update released today by the United Nations Economic and Social Commission for Asia and the Pacific(ESCAP), growth in Asia-Pacific developing economies is also expected to be less bright  due largely  to continued uncertainties in the advanced economies.
In 2012, growth is forecast to slip from an earlier estimate of 7.2 per cent this year to 6.6 per cent.

While showing that Asia-Pacific growth will slow down significantly in 2012 due to continuing uncertainty in the advanced economies, the report pointed out that the region has the means to offset the adverse impact.
Asia and the Pacific is expected to continue driving the global economy in 2012 and remains the world’s fastest growing region as it is in a position to sustain its economic dynamism due to strong macroeconomic fundamentals, according to ESCAP
“If serious pressures on growth performance were to materialise, the strong budgetary positions of many countries would allow the enactment of short-term fiscal stimulus measures, as some countries have already begun doing,” said Nagesh Kumar, Chief Economist of ESCAP who launched the Year-end Update in Bangkok.
The other positive news for the region, coping with historically high and volatile prices, is a moderation in inflation levels in 2012 in the export-led economies, though this is partly due to “a reduction in demand emanating from the sluggish global environment,” according to the Update.
“However, some countries with relatively high inflation levels confront the dilemma of maintaining price stability in the face of slackening growth resulting from a deteriorating global environment,” Kumar said.
The impact of the financial and economic crisis in the European Union and the United States will vary across the region with domestic demand-led economies relatively unaffected.
Among the major emerging economies, while global export powerhouse China is forecast to see growth decline from 9.3 per cent this year to 8.5 per cent in 2012, India is also forecast to see relatively constrained growth of 7.8 per cent in 2012. Indonesia is forecast to maintain robust growth performance of 6.5 per cent next year.
Korea and Hong Kong, China, are forecast to see their 2012 growth decline to 3.5 per cent and 4.3 per cent, respectively, from this year’s 3.9 per cent and 5 per cent, respectively.
Singapore’s 2011 projected growth of 5.2 per cent will slip to 3 per cent next year, while Thailand’s 2011 flood crisis-reduced growth of 2 per cent is projected to more than double to 4.5 per cent next year on the back of a resumption of production and large-scale reconstruction projects.
“Most countries in the region retain substantial fiscal space to be able to increase government spending. Interest rates, which are currently at relatively high levels across the region, can also be kept on hold or even decreased if necessary, which could greatly stimulate lending across the region.”