MANILA – Asia’s emerging countries, including China, India and Southeast Asian economies, are expected to grow 6.4 percent during the current year, according to a report by the Organization for Economic Cooperation and Development published on Tuesday.
The OECD presented its “Economic outlook for Southeast Asia, China and India: Fostering Growth through Digitalization” report at an Association of Southeast Asian Nations summit in Manila.
“In 2017, Growth in China and ASEAN is picking up due to a strong trade rebound and resilient domestic consumption, while India’s growth is expected to nudge downward as a result of taxation and monetary reforms,” special advisor to the OECD, Mario Pezzini, said in the report.
The rapid monetary policy normalization in advanced economies, the growth of private sector debt and broadening of trade restrictions are the main risks for growth.
The OECD expects China’s economy to grow by 6.8 percent in 2017, below the average of 7.9 percent between 2011 and 2015, while it forecasts a further slowdown to 6.2 percent for 2018-2022.
India’s gross domestic product is anticipated to drop to 6.6 percent in the current year, compared to 7.1 percent in 2016, while the growth projection for 2018-2022 is 7.3 percent.
OECD has projected that ASEANS’s GDP for 2017 will increase by 5.1 percent, with further growth during of 5.2 percent expected for 2018-2022.
Myanmar is projected to grow 7.2 percent in 2017, the most in the bloc, followed by Cambodia (7.1 percent), Laos (6.9 percent), Philippines (6.6 percent), Vietnam (6.3 percent), Malaysia (5.5 percent), Indonesia (5 percent), Thailand (3.8 percent), Singapore (3.2 percent) and Brunei, with 0 growth.
ASEAN, which is celebrating its 50th anniversary in 2017, must still make further progress in eliminating trade taxes, digitizing its economies, liberalizing services and movement of skilled labor, according to the OECD.
It also stressed the importance of digitization of the Asian economy, with the emergence of software development in Vietnam, the internet service sector in the Philippines or digital payment in China.
However, it pointed out that the internet access in the region is still very uneven, from 81 percent in Singapore to 22 percent in Laos.
“Fostering inclusive growth through digitization requires reforms to trade and investment policies, the development of supportive infrastructure, and addressing labor market challenges,” the report concluded.