ADB Says Asian GDP Growth Challenged by Rising Energy Demand

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Economic growth in the Asia-Pacific region will show a distinct improvement in 2013 and 2014 when compared with 2012, according to the Asian Development Bank's "Asian Development Outlook 2013" (ADO). In 2012, growth stood at 6%. The forecast is 6.6% for 2013 and 6.7% for 2014. Consumer prices are expected to increase 4 % in 2013 and 4.2% in 2014, which is up from 3.7% in 2012.

In general, leading regional economies are settling into a pattern of more moderate, more sustainable growth, the ADB said. This growth is founded on new opportunities in the region, including domestic consumption and intra-regional trade, and Asia's contributions to global imbalances and persistent current account imbalances are smoothly winding down. But, warns the bank, Asia's recovery phase remains vulnerable to shocks. For example, strong asset inflows could feed asset bubbles.

Asia faces energy challenges. It needs an ample supply of clean, affordable energy to continue its rapid growth in the coming decades. An effort must be made by developing Asia to actively contain its rising demand, aggressively explore new supply sources and technology, and progressively integrate regional energy markets and infrastructure to achieve energy security. Expanding renewable energy sources will not be enough to meet future demand. Asia needs to invest in making conventional power sources cleaner and more efficient.

The ADO forecasts that growth will rebound in China from 7.8% in 2012 to 8.2% in 2013, and to 8% in 2014. The growth will be driven by strong consumption investment.

If India is to sustain a higher rate of growth, it must create a more favorable environment for investment. It has the potential to grow from 5% in 2012 to 6% in 2013 and 6.5% in 2014.

For related information, see April 12, 2012, article - Asian Development Bank Forecasts Stable Asian GDP Growth in 2012, with Uptick in 2013.

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