The East Asian economy (excluding Japan)
is projected to grow by 7.0% in 2006, according to a report released today
by the Institute of Developing Economies, Japan External Trade Organization
(IDE-JETRO). The report, entitled "2006 Economic Outlook for East Asia",
provides growth estimates for 2005 as well as prospective 2006 growth
figures for China, the four Asian NIEs (the Hong Kong Special Administrative
Region (SAR), the Republic of Korea (ROK), Singapore and Taiwan) and the
ASEAN 5 (Indonesia, Malaysia, the Philippines, Thailand and Vietnam).
Estimated Growth in 2005
According to the report, the East Asian economy as a whole is predicted
to post a 6.9% growth in 2005, down 0.6 points from last year's figure;
the combined inflation rate is estimated to decline 0.3 points year-on-year
to 4.0%. This slight decline in the area's economy reflects stagnant economic
growth in developed countries and a global slowdown in demand in IT and
other high-tech industry sectors during the first half of 2005.
Although domestic demand slowed somewhat, China's economy, driven by growth
in net exports, is projected to grow a robust 9.5% in 2005, the same figure
as last year.
The combined growth rate for the four Asian NIEs in 2005 is estimated
at 4.3%, a 1.4-point drop from last year's figure. Individually, ROK and
Taiwan are estimated to grow at slower paces in 2005, at 3.7% and 3.6%
respectively, due to weaker external demand. Hong Kong SAR and Singapore-after
posting strong growth in 2004-are also estimated to grow at slower, yet
steady, paces in 2005, at 7.0% and 5.4% respectively.
The combined growth for the ASEAN 5 in 2005 is estimated at 5.3%, a 0.7-point
drop from the 2004 figure. Vietnam, on the back of the country's booming
industrial and service sectors, is estimated to post the highest individual
growth figure among the five, at 8.3%. Indonesia, led by buoyant external
demand, is projected to grow at 5.5%, while Malaysia's growth rate is
estimated to slow to 5.0% in 2005, due to weakened private sector demand.
The Philippines is predicted to grow at 4.8%, supported by overseas remittances,
while Thailand is estimated to grow at 4.6%, owing to the Thai government's
aggressive fiscal policy.
Forecasted Growth in 2006
According to the IDE-JETRO report, the East Asian economy as a whole will
post solid growth of 7.0% in 2006. China's economy may slow somewhat,
while growth is expected to pick up in the ASEAN 5 and four Asian NIEs;
the combined inflation rate is forecast to remain almost unchanged (from
the projected 2005 figure), at 4.1%.
China's economy, which is expected to remain buoyant in 2006, is forecast
to grow 9.0%, down half a point from this year's projected growth figure.
The combined growth rate for the four Asian NIES will recover to 4.9%
in 2006, up 0.6 points from the projected 2005 figure. ROK and Singapore,
fueled by brisk investment and increased exports, are expected to post
growth figures of 5.0% and 5.7 respectively. Taiwan, despite stagnant
investment, is forecast to grow at 4.1%, led by increased exports. Reflecting
a slowdown in the Chinese economy, Hong Kong SAR is projected to mark
only moderate growth, at 5.4%, in 2006.
The report predicts a stable 5.4% growth for the combined economies of
the ASEAN 5 in 2006-roughly the same as the projected 2005 figure. Individually,
Indonesia is forecast to grow at 5.4% (close to the projected growth figure
for 2005). Thailand will mark solid growth in 2006, adding 0.4 points
year-on-year to reach 5.0%, boosted by the government's aggressive fiscal
policy. Malaysia is forecast to grow at 5.4%, driven by a recovery in
exports and private-sector investment, while the Philippines, backed by
a recovery in investment, is predicted to grow at 5.0%. The Vietnamese
economy, although a slight slowdown is forecast, will still grow a robust
8.0% in 2006.
View the full report at: