Op-Ed Contributors

Time to unwind stimulus in East Asia

By Srinivasa Madhur (China Daily)
Updated: 2010-07-22 07:53

China, of course, has been at the epicenter of emerging East Asia's economic upsurge. Its policy stimulus package was by far the region's largest. Its growth in first quarter of this year was a torrid 11.9 percent. The second quarter was slightly tamer at 10.3 percent, with investments made last year accounting for nearly 90 percent of the growth. The ADB forecasts the trend will continue, with economic growth this year and next year being 9.6 percent and 9.1 percent.

After being badly hit by the global economic crisis in the early part of 2009, the newly industrialized economies of Hong Kong and Taiwan, and the ROK, and Singapore are forecast to achieve a solid 6.2 percent growth this year, moderating slightly next year.

The economic prospects of the four mid-income ASEAN economies, Indonesia, Malaysia, the Philippines and Thailand, look good for this year after last year saw their poorest performance since the Asian financial crisis. Leading indicators continue to improve in these economies, with strong industrial production growth and rising consumer confidence. This is also true for most other ASEAN economies. Together, ADB expects ASEAN to expand by 6.7 percent this year.

Emerging East Asia's "V for victory" may still be far away. But at the moment, it is certainly forging the right path.

The author is senior director of the Office of Regional Economic Integration at the Asian Development Bank.

(China Daily 07/22/2010 page9)