This quarter promises continued economic improvement in Asia, according to our latest web poll. More than half the respondents said that conditions in the second quarter of 2011 would keep on getting better.
Such optimism reflects what most economists are saying, too. Just last week, the ADB predicted that Asia would continue to enjoy solid growth for the next two years, led by the region’s two biggest economies: China and India.
But many respondents to our poll were not so sure. They see banana skins looming on the horizon, in the form of inflation, social upheaval and the failure to develop new sources of growth. On the first of those, data from China show that growth has cooled since the last quarter of 2010, helping to discourage the country’s economy from overheating. At the same time, growth is not so weak that people are taking to the streets.
So far, it is much the same story across most of Asia — central banks postponing interest-rate hikes in the wake of better-than-expected inflation data. That is a problem delayed, rather than solved, so there are still some tough calls ahead, but the consensus favours an optimistic outlook for the region.
“Developing Asia, having shown resilience throughout the global recession, is now consolidating its recovery and rapid expansion in the region’s two giants — the People’s Republic of China and India — will continue to lift regional and global growth,” said Changyong Rhee, ADB’s chief economist, in a statement accompanying the release of its annual report, Asian Development Outlook.
Overall, 55% of our respondents said that Asia’s economy would continue to improve in the second quarter, while 29% said it would worsen and 15% reckoned it would stay the same.
