United Nations economists have warned that higher oil prices and a lower U.S. dollar will combine to slow the Asian economies' growth this year. The U.N. Asia-Pacific survey also added its voice to calls for China to adopt more flexible foreign exchange and interest rate policies.
United Nations economists, in their latest survey for the Asia-Pacific region, see growth slowing this year after several successive years of strong increases.
The annual U.N. survey for the region provided a generally upbeat outlook for the coming year, predicting growth will be above six percent.
But the survey said growth is unlikely to equal the 7.2 percent reached last year, the best regional performance since 2000. Raj Kumar, U.N. economist, said high global oil prices and a rise in interest rates were a source of concern for the region.
"The oil price combined with the American deficits and falling dollar can lead to a high inflation and rate environment," he said. "So we should not expect the same growth momentum in the last two to three years to carry on."
The economic survey warned the region about rising numbers of unemployed youth, now at 38 million, and said governments have to deal with the fast-growing elderly population, especially in Japan and China.
The U.N. economists expressed concern over China's rapid economic growth, which expanded by 9.5 percent last year despite efforts by Beijing to cool it down.
Mr. Kumar said the unchecked growth in China's economy could have undesirable effects world-wide.
"Provided the growth is accompanied by faster productivity, that will be much better," he added. "But if growth is accompanied by more investment, that will just drive up inflationary pressures in China, which has implications in the rest of the world."
The economic survey backed calls in Washington and elsewhere for China to introduce more flexibility in its currency and interest rate policies.
The United States, facing rising trade deficits with China, has repeatedly called on Beijing to revalue its currency. Chinese officials in recent days have said China was better prepared to loosen the currency's peg to the U.S. dollar, although no time frame was given.