Asia's economic growth is expected to crest this year but regional economists remain upbeat about future prospects. A new report from the Asian Development Bank says East Asia's economic expansion is set to peak, with growth hitting about 7.3 percent later this year.
The head of the bank's monitoring unit, Pradumna Rana, however, says growth in the coming years will remain robust. "Economies will slow down but they will still register growth of about six and a half per cent next year which is very solid, best in the world if you like," he says.
The largely upbeat report covers China, South Korea, and the 10 countries in the Association of Southeast Asian Nations. The rapid growth in East Asia has been fueled by increased exports and strong domestic demand. Resurgent economies in Japan and the United States contributed to the growth in regional exports.
The report does highlight three possible drags on future economic expansion.
Continued high oil prices and unexpectedly high interest rate increases in the United States could significantly slow growth.
And Mr. Rana warns regional stability could suffer if the soaring Chinese economy crashes. China's government is trying to gently slow the economy, to keep it from overheating and then collapsing. "If it is a soft landing, then of course the slow down in other countries will also be soft, but if China were to go down harder than expected soft landing, than other countries could face risk," he says.
The report notes there has been a slight up-tick in inflation in Asia caused by rapid economic growth and the high price of oil.
The Asian Development Bank, based in the Philippines, is dedicated to reducing poverty in Asia and the Pacific.
On Wednesday, the bank announced a new one million dollar grant to boost regional food production. The money will finance rice cultivation projects in Vietnam, Cambodia and Thailand.