East & South Asia To Show Fastest Growth Among All Regions - UN Report

BANGKOK, Jan 20 (Bernama) -- East and South Asia is positioned to exhibit the fastest growth among all regions as the global economy continues to be trapped in a prolonged slow growth, according to a United Nations report released Thursday. The World Economic Situation and Prospects (WESP) 2017 Report said East Asia's economy was estimated to have grown 5.5 per cent last year, with a marginal pick up to 5.6 per cent in 2017. "Private consumption and public investment continue to drive growth. However, the subregion's export growth remained exceptionally weak in 2016, which has negatively affected consumer sentiment, resulting in weaker household spending in several economies," it said. The relatively low public debt, said the report, meant that there was still room for fiscal expansion and there were encouraging signs that the subregion would emerge from the two-year stretch of producer-price deflation. "This could have a positive impact on corporate profits and investment." On China's economy, the report said the country's stable growth in 2016 had alleviated near-term concern of a sharp growth slowdown. On the back of favourable domestic demand and supportive fiscal measures, the Chinese economy is projected to grow by 6.5 per cent per annum in 2017-2018, down slightly from the estimated 6.6 per cent last year. Meanwhile, the Indian economy had positioned itself as one of the most dynamic emerging economies with growth projected to reach 7.7 per cent this year and 7.6 per cent in 2018 amidst strong private consumption, said the report. Despite the positives, it cautioned of the significant downside risks to the global and regional outlook such as high degree of uncertainty in the international policy and elevated foreign currency-denominated debt levels. For East and South Asia, it said potential renewed episodes of high financial volatility including a sudden surge in external borrowing costs and large capital outflows could significantly increase the difficulties to roll over debt. "In this context, high and rising corporate and household debt in some East Asian economies, most notably China, is a cause for concern," the report said. --BERNAMA