Looking to the East

 

Latest statistics from the Asian Development Bank (ADB) for developing Asia, which covers 45 nations, predict GDP would grow by 6.6% this year and by 6.7% in 2014.

The group of developing Asian nations includes major emerging economies such as China, India and Indonesia,

Economic growth across the group slowed to 6.1% in 2012, the lowest rate since 2009 when it was 6%.

Various factors are buffeting the region; strong capital inflows could feed asset bubbles. Political discord surrounding fiscal debates in the United States, austerity fatigue in the euro area, and border disputes in Asia could jeopardise macroeconomic stability.

Ongoing sluggishness in the United States, Euro area, and Japan suggests that developing Asia must continue to shift toward more domestic demand and trade with emerging markets.

The ADB forecast China's economy would expand by 8.2% this year, up from 7.8% last year, on the back of strong domestic demand and better export performance.

China's President, Xi Jinping, has recently stated that the days of double-digit economic growth in the country were likely to be over.

European markets remain crucially important to China but with European economies in a fragile state the implication for export growth is obvious.

The potential for the Euro  debt crisis to spread would result in a further decline in economic activity in the months ahead.