ADB expects China's economy to grow 8.2 pct in 2013

A report released by the Asia Development Bank here Tuesday forecast China's GDP growth of 8.2 percent in 2013, up from last year's 7.8 percent, due to strong consumption and fiscal spending.

The above estimation was made assuming that the U.S. economy will continue its slow recovery, conditions in the eurozone will not worsen and the Chinese government will continue to boost public spending.

"The country's new leaders are focused on delivering sustainable, quality growth, which is a welcome change from the growth-at-all-costs approach of the past," said ADB Chief Economist Changyong Rhee.

The report, Asian Development Outlook, also predicted the GDP growth in developing Asia of 6.6 percent in 2013 and 6.7 percent in 2014, from a growth of 6.1 percent in 2012.

The report projects stronger economic activity in developing Asia to spur renewed price pressures, with inflation seen moving up from 3.7 percent in 2012 to 4 percent in 2013 and 4.2 percent in 2014.

Rhee said the rebound in China and solid momentum in Southeast Asia were lifting the region's pace after the softer performance of 2012.

"Domestic spending, in particular consumption, is the main driver of the recovery, and is a welcome shift from the reliance on the markets of advanced economies," he said.

Talking about Japan's easing monetary policy, Rhee said it aims to stimulate economy at the moment, while a flexible fiscal policy and an economic structure reform are needed for the economy to revive in the long term.

The report also said reforms are needed in India to facilitate the turnaround from growth deceleration due to structural bottlenecks, deteriorating investment and a worsening current account deficit.

"Supply and policy obstacles have seen growth decelerate and investment and industrial output slump, with the stasis compounded by weak global demand," said Rhee.

It projects India's GDP growth to edge up to 6 percent in the fiscal year to end March 2014, picking up slightly to 6.5 percent the following year, in the back of stronger external demand and progress on reforms.

The bank also suggested that Asia is moving along a dangerously unsustainable energy path that will result in environment disaster and a gaping divide in energy access between rich and poor unless the region dramatically changes course.

The report recommended a pan-Asian energy market to be established by 2030, including the setting up of ministerial level task force to study European experience.