FALTERING GROWTH IN ASIA

AS GROWTH FALTERS, ANALYSTS ASK HAS ASIA LOST ITS MOJO?

AFP

The Jakarta Globe, October 07, 2012

First the IMF warned developing Asia to brace for shocks from the West. Then the Asian Development Bank slashed its regional growth forecasts. Now analysts are asking, has Asia lost its mojo?

The European debt crisis and weakness in the United States have long been drags on Asian growth, but throw in China’s difficult leadership transition and the outlook is grim.

“It wasn’t supposed to turn out like this. Growth in recent months has faltered again, confounding expectations of a gradual recovery,” HSBC economists Qu Hongbin and Frederic Neumann wrote in a report released last week.

“China is one culprit, though a wobbly West is equally to blame.”

As Asia’s powerhouses China and India slow faster than many had expected, the ADB last Wednesday revised down its growth estimates for the region’s emerging economies to the lowest level since 2009.

Echoing assessments from the International Monetary Fund, the bank also warned of significant risks arising from the eurozone and the uncertain recovery in America, both of which are major export markets for Asian manufacturers.

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