Tuesday, February 12, 2008

UN Report States little Slowdown for Asian Economies for 2008

by Michelle Roberts

According to the report by the United Nations it is predicted that the economies falling in the Asia Pacific will suffer a little slowdown in their economies for the year 2008. The main reason for the slowdown in the economies cited by the report is that the exports by the Asian countries will fall down owing to the unstable economy of the United States that affects the economies of the world. However the overall picture of these economies will remain healthy which is mainly because of the thriving growth in the economies of India and China which are touted as the world’s fastest growing economies. The Indian economic growth stands at nine percent while the Chinese economic growth will be at 10.8% in the year 2008 which the report stated. The economies of other Asian countries like Japan, Australia and New Zealand will be growing at the rate of 7.8% for the year 2008. The figure for these countries for the last year was 8.2%, which the United Nations Economic and Social Commission for Asia and the Pacific or the UNESCAP reported.

The UN report added that Asian countries will have to withstand challenging external economic environment accentuated by the slowdown in the economy of the United States but there will be a continued appreciation of the currencies of the region. The Asian economies that heavily rely on their exports will be hit hardest owing to the US economic slowdown and the weak growth in the economy of Japan. The UN report also warned that the exports relating to textile and agriculture will have to bear the brunt because the demand for such exports in the West and Japan will be slow. The silver lining to this depressing economic scene according to the report will be provided by the Asian countries like India and China that have recorded robust growth; strong economic fundamentals as well as upbeat commodity prices will boost slowdown of the region.

The risk factors for Asia according to the UN will be mainly the crisis in the US housing market. The UN report also warned that the losses resulting from the sub prime mortgage crisis will increase significantly in the current year and can affect the economies of Asia. The United Nation also added that the economic growth of Japan for the year 2008 would be slow. The UN report also stated that the economy of Japan has yet to become strong so that it can work as the alternative growth engine for Asia when affected by the slowdown in the economy of the United States. Japan’s economy thus lacks the strength to face the unsteady economy of the United States. The economy of Japan would grow only by 1.7% in the current year. The growth rate of the economy of Japan in the last year was 2.0. The UN report stated that the rates of inflation in Asia will continue to remain high as prices of oil and food keep on rising globally.

 

 

 

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