ADB's Chief Economist Changyong Rhee discusses the latest macroeconomic outlook for developing Asia and looks at the kind of structural change needed in the region to promote further growth.
Title: New Growth Outlook For Developing Asia
Description: ADB's Chief Economist Changyong Rhee discusses the latest macroeconomic outlook for developing Asia and looks at the kind of structural change needed in the region to promote further growth.
Q: What’s the overall outlook for developing Asia?
A: We are expecting that developing Asia will grow 6.0% this year and 6.2% next year. We have relatively good news from advanced economies. On the other hand, growth of Asia’s two giants, China and India, is moderating.
Q: Without the two regional giants, what’s the picture like for the rest of the developing Asia?
A: The rest of Asia continues to have a resilient growth momentum, around 4%. But recently after the hint of the tapering, some of the Asian countries are subject to financial turmoil. And together with the moderation of China, the growth rate is slightly low this year. But on the other hand, we believe that this is a short-term phenomenon. And the other rest of Asia will continue to maintain its resilient growth momentum.
Q: What impact is US quantitative easing tapering likely to have on Asian economies?
A: You know, this recent financial turmoil in emerging times, emerging financial market is quite vulnerable… Asia is not an exemption. On the other hand, I think, the fear of the repeat of 1997 style financial crisis really, really unwarranted it… they have larger full integers and we learned a lot after the 1997. And our financial sector, especially banking sector, is much stronger as of this moment.
Q: What kind of additional structural reforms are needed in the region to consolidate growth?
A: It is very important to understand this recent financial turmoil and really emphasize the structure reform not just for the long term growth rate but also to stabilize the financial market in the short term. What agenda? I think the agenda should depend on the countries, but improving the physical space and upgrading human capital and you know, building the social safety net, closing the infrastructure gap must be the common elements.