Asia to stay world’s fastest growing region by 2030
Staff Writer |
T he global economy is continuing its gradual recovery from the financial crisis, with the latest data pointing to a broad-based pickup.
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However, longer term Asia is seen maintaining its position as the fastest-growing region, with China and India leading the charge.
The Organization for Economic Cooperation and Development’s (OECD) latest “Economic Outlook†report suggests fiscal and monetary stimulus has underpinned a synchronized improvement in growth rates across most countries.
The Paris-based organization forecasts a 3.6% global expansion this year, rising to 3.7% in 2018, albeit still below the pre-crisis period and that of past recoveries, The Diplomat reported.
For the Asia-Pacific region, the OECD projected further expansion for the region’s largest economies. China is expected to post a 6.8% rise this year, although easing to 6.6% in 2018 and 6.4% in 2019 as the authorities “rebalance†the growth model for the world’s second-largest economy.
Japan, the world’s third-largest economy, is seen extending its longest expansion in nearly two decades with a 1.5% GDP rise this year. This would be followed by around 1% growth for the next two years, amid an expected consumption tax hike and declining labor force.
South Korea is seen sustaining growth at around 3% through 2019, helped by stronger global trade and greater fiscal support, although high household debt and weak employment growth could weigh on consumption.
Among the emerging stars, India is expected to surge from 6.7% GDP growth this year to 7% in 2018 and 7.4% in 2019, due to further reforms that are seen boosting investment, productivity and growth.
Indonesia should also enjoy steady growth around 5%, with rising household incomes supporting increased consumption.
Australia is seen posting a growth pickup from 2.5% in 2017 to 2.7% next year, extending its record-beating economic winning streak.
However, the OECD expects its central bank to start hiking rates from the second half of 2018, with the economy vulnerable to “too big to fail†risks due to its indebted household sector and concentrated banking industry. ■