Growth in Asia's emerging economies expected to slacken in 2014

Growth in the gross domestic product (GDP) of the emerging economies in the Asia-Pacific region will slow down this year, according to the UN Economic and Social Commission for Asia and the Pacific (ESCAP) and most multilateral lending institutions.

The Bangkok-based ESCAP said in its yearend report released in mid-December last year that countries in the region will face " another subpar growth in 2014 due to slow recovery, policy uncertainty and protectionism in developed countries."

"Asia-Pacific developing economies face the prospect of a 'new normal' of lower growth in the coming years, underlining the need for forward-looking macroeconomic policies and intraregional cooperation," Anisuzzaman Chowdhury, ESCAP director of Macroeconomic Policy and Development division, said in summarizing the report.

According to ESCAP, Asia's developing economies are forecast to grow 5.6 percent in 2014.

The report said that key economies of China, India and Indonesia with large domestic markets grew moderately in 2013 after recent years of strong performance, although China's economy is still growing relatively fast at 7.5 percent in 2013 and is projected to expand by 7.3 percent in 2014.

India's growth is expected to rebound in 2014 to 6 percent after remaining unchanged at around 5 percent in the preceding two years while Indonesia has recorded the lowest growth in recent years, estimated at 5.7 percent in 2013 after expanding at 6.2 percent in 2012, the report said.

Earlier, the World Bank also lowered its 2013 and 2014 economic growth forecasts for developing East Asia.

"Developing East Asia is expanding at a slower pace as China shifts from an export-oriented economy and focuses on domestic demand," the World Bank said in its latest East Asia Pacific Economic Update report.

The Washington-based development bank now expects developing East Asia to expand by 7.1 percent in 2013 and by 7.2 percent in 2014, down from its April estimate of 7.8 percent and 7.6 percent, respectively.

Final statistics on economic growth last year in the region are still being compiled and would not be available until the end of this month.

The World Bank expects the Chinese economy to expand by 7.5 percent in 2013 down from its April forecast of 8.3 percent.

China's 2014 growth is estimated at 7.7 percent, the World Bank said, down 0.3 percentage point from the previous prediction.

The World Bank expects the Philippines to grow by 7.0 percent last year, much faster than the April forecast of 6.2 percent. For 2014, the Philippine economy would probably expand by 6.7 percent, better than the bank's previous estimate of 6.4 percent.

The World Bank said its regional forecasts faced greater likelihood of being revised downwards than upwards, citing potential headwinds such as a less orderly tapering of the U.S. Federal Reserve's stimulus program and a prolonged fiscal deadlock in Washington.

The International Monetary Fund (IMF). on the other hand, said that Asia is likely to remain the world's economic engine despite increasing volatility in international financial markets.

In its latest update on Regional Economic Outlook, the IMF said that they are "essentially optimistic that despite the more complex global environment, Asia will remain a growth leader with emerging Asia growing above 6 percent in 2013 and next year."

The IMF said that it expects Asia's economy to grow at 5.3 percent in 2014, up from 5.1 percent in 2013.

In a report also released last month, the Organization of Economic Cooperation and Development (OECD) said that economic outlook for Southeast Asia, China and India remains robust over the medium term, anchored by the steady rise in domestic demand.

The OECD said that growth in emerging Asia is projected to moderate gradually but stay resilient over the 2014-2018 period, with an average annual growth of 6.9 percent, albeit less than the 8.6 percent registered before the global financial crisis in 2007.

In its update on the region also released last month, the Manila-based Asian Development Bank (ADB) said an improving growth outlook in Japan and the United States along with the stronger- than-expected performance in China support a steady growth outlook for developing Asia.

The ADB forecasts average growth of 6 percent in 2013 for its 45 developing member countries, improving to 6.2 percent in 2014. The forecasts were essentially unchanged from its update issued in October 2013.

"Despite uncertainties in the global economic environment, developing Asian economies remain resilient. The region has performed well in 2013 and is now poised to benefit from the further signs of growth momentum in the advanced economies," the ADB said.