Emerging Asian economies to remain resilient – OECD
Emerging Asian economies are expected to remain resilient but structural reform is critical, according to the new Economic Outlook for Southeast Asia, China and India from the Organisation for Economic Co-operation and Development (OECD).
The economic outlook for Emerging Asia (Southeast Asia, China and India) remains robust over the medium term, anchored by the steady rise in domestic demand, according to a new report from the OECD Development Centre. GDP growth in Emerging Asia is projected to moderate gradually but stay resilient over the 2014-18 period, with an average annual growth of 6.9%, albeit less than the 8.6% registered before the global financial crisis (2000-07). The region will continue to play an important role in global growth, the OECD also said.
The Economic Outlook for Southeast Asia, China and India says Indonesia is projected to be the fastest-growing ASEAN 6 economy with an average annual growth rate of 6.0% in 2014 18, followed by the Philippines with 5.8%. Real GDP growth in Malaysia and Thailand is projected to increase by an annual 5.1% and 4.9% respectively, led by domestic demand, especially in infrastructure investment and private consumption. Singapore’s economy is forecast to grow by 3.3%. Cambodia, Lao PDR, Myanmar and Viet Nam are expected to grow at a robust pace over the medium term.
“The success of emerging Asian economies will hinge on managing several challenges”, said OECD Deputy Secretary General Rintaro Tamaki. “To harness the medium-term growth potential, it is critical that policy makers implement structural policies to reap the benefits of capital flows and foster closer economic co operation and integration in the region.”
Mario Pezzini, director of the OECD Development Centre added: “While Emerging Asia has made remarkable economic progress over the past four decades, some of the middle-income developing economies face difficult challenges to sustain their long-term growth and move beyond the middle-income trap. Indeed, success will require fundamental changes in economic structure and further development of the modern services sectors.”
In the “best scenario”, if fundamental changes are applied, China and Thailand could become high-income countries within 20 years. On the other hand, Viet Nam and India will need more than 40 years to reach the high-income group.
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