Growing income disparities threaten to undermine the economic success of developing Asia unless the benefits of growth are shared more widely, according to the Asian Development Bank’s recent annual trawl through the region’s economies.
“Asian Development Outlook 2012” checks out the 45 economies in Asia and the Pacific that make up developing Asia.
It says the region has made great strides in raising living standards and reducing poverty but warns that policymakers need to step up their efforts to even out incomes.
The report finds that developing Asia will largely maintain its growth momentum in the next couple of years despite weak global demand. From moderate 7.2 percent in 2011, growth in the region will ease to 6.9 percent in 2012 before picking up to 7.3 percent in 2013.
“The greatest risk to the outlook is uncertainty surrounding the resolution of sovereign debt problems in the Eurozone. But in the absence of any sudden shocks, developing Asia can manage the effects on its financial markets and trade flows.
“There is no clear case for policymakers in the region to pursue short-term fiscal or monetary stimulus measures.”
Inflation for most regional economies subsided in the second half of 2011 as international commodity price rises slackened, but threats of oil supply disruptions risk further price spikes. Volatile foreign capital flows remain concern as investors shift their risk perceptions in response to the changing global environment. M
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