Full Report - Subregional Office for East and North-East Asia - escap

THE STATE OF INCLUSIVE AND SUSTAINABLE DEVELOPMENT IN UNCERTAIN TIMES CHAPTER 1
Russian Federation. Renewed growth in India and
healthy domestic demand should help to push up
growth in South and South-West Asia. In contrast,
developing Pacific island economies are likely to
continue to face sluggish growth. As a group,
Pacific island economies growth is projected to
decelerate in 2013 due to a sharp, energy sectorled
slowdown in Papua New Guinea which is by
far the largest Pacific island economy. However,
demand from Australia and New Zealand should
remain reasonably strong.
Despite the moderation in growth in the region as
compared to previous robust rates, Asia and the
Pacific still remains the most dynamic region globally
and exerts increasing influence on other developing
regions. The region is forecast to grow in 2013 at
a rate far more rapid than not only the developed
regions of the world, but also compared to other
developing regions (see figure 1.18). The growing
economic weight of the Asia-Pacific region has
led to increasing interaction with other developing
regions, most notably Africa and Latin America.
However, in this regard, there remains significant
unfulfilled potential. ESCAP analysis indicates that
global South-South exports could increase by an
additional $194 billion during 2013-2014, if trade
costs of low-performing developing countries could
converge by one-fifth towards the levels of highperforming
developing countries through greater
South-South cooperation in trade facilitation and
logistics services and infrastructure development
(see box 1.5).
Modest inflation forecast for 2013
The inflation forecast is generally modest in 2013,
with prices projected to increase by 5.1% in the
region (see table 1.2). Although inflation is not
poised to rise sharply, it is important to note that
prices are high, causing severe hardship to the
poorest and most vulnerable sectors of society in
many economies. Furthermore, while overall inflation
may not rise for many economies, the key food and
fuel sectors may face price pressure due to global
supply concerns. The overall moderate outlook for
inflation is due to growth remaining relatively weak,
resulting in reduced domestic demand-pull factors
and inflationary expectations. The inflation outlook
is conducive for loosening monetary policy, but
such an approach needs to be accompanied by
active macroprudential policies and capital controls
to prevent external-led pressures on asset prices.
Moreover, monetary or credit expansion should be
carefully designed to support SMEs, agricultural
production and environmentally friendly industries.
Figure 1.18. Real GDP growth by regions of the world, 2012-2013
Asia-Pacific
Africa
Middle East
Latin America
and the Caribbean
Europe a
2012
2013
-4 -2 0 2 4 6 8
Percentage
Sources: ESCAP, based on data from the United Nations regional commissions.
a Member countries of the European Economic Commission.
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