UNESCAP's Bulletin on Asia-Pacific Perspectives 2004/05 said this month that in spite of the turbulent and volatile economic global scenario, UN economists and eminent thinkers in the region predicted that the region will continue to experience solid growth in 2005. Meanwhile, according to a recent report released by the ADB, East Asia is likely to register this year its best GDP growth since the 1997 financial crisis despite high oil prices and some loss of growth momentum.

UNESCAP Executive Secretary Mr Kim Hak-Su said "In 2004 the Asia-Pacific region witnessed high and volatile oil prices and ongoing geopolitical tensions in West and North-East Asia. Nevertheless, the region showed remarkable resilience continuing to show strong growth." An environment of low inflation and low interest rates aided domestic consumption and investment growth while buoyant GDP growth in China stimulated strong intraregional trade growth, said Mr Kim.

He also predicted that the region should experience solid growth in 2005, perhaps only half a percentage point less than in 2004, and it should continue to outpace the global economy. However, he also cautioned that such an outcome would hinges upon a) whether China has a soft or a hard landing in 2005, b) whether Japan's strong recovery in 2004 is sustained c) how the US deals with its current account and fiscal deficits, and d) the course of oil prices in 2005.

Meanwhile, a report prepared by ADB's Regional Economic Monitoring Unit (REMU) said in late December of this year that East Asia is likely to register this year its best GDP growth since the 1997 financial crisis, reaching 7.6%, despite high oil prices and some loss of growth momentum. The report said forecasts for next year would be subject to three main risks: continued high oil prices, a disorderly adjustment of the US current account deficit, and a hard landing in China.

For more information: UN Information Services Bangkok: unisbkk.unescap@un.org and gdwyer@adb.org