THE Asia and Pacific region’s growth prospects are tied to regional integration and investment, the Asian Development Bank said.
In its Asian Economic Integration Report 2017 released on Wednesday, the bank noted that growth in Asian trade accelerated to 7.4% in the first half of the year amid the recovery of the global economy.
“In turn, steady growth in advanced economies – especially in the United States and euro area – will buoy external demand across Asia; trade volume growth will likely accelerate from 1.8% in 2016 to 4.4% in 2017, 1 percentage point above forecast global trade growth,” the bank said.
Among the top contributors to the region’s trade will be Philippines, among several middle-income states in the Association of Southeast Asian Nations (ASEAN).
“In these economies, exports will benefit from weakening local currencies and a mild rebound in commodity prices. Buoyant domestic demand – especially from resilient private consumption and sustained public and private investment – will also support import growth.”
The region’s trade volume grew 1.7% in 2016 compared with 1.4% in 2015, led by exports from Japan, Taiwan, and Hong Kong. Global trade growth on the other hand fell to 1.3% from 2.6%.
The share of intraregional trade also rose to 57.3% last year from 56.9% in 2015. According to ADB, the continuing trade within Asia can help the region weather uncertainties in global trade.
Excluding China, 2016 export volume growth rose to 2.3% from 1.9% in 2015. However, growth in the value of trade declined to 3.4% from 10.2% in 2015.
However, global gross foreign direct investments (FDI) declined by 6% to $492 billion in 2016 from 2015’s $525 billion, dropping Asia’s share from 30% to 28%.
Asia’s outbound FDI went up by 11% to $482 billion from 2015’s $434 billion, representing 33% of the global FDI.
Foreign direct investments within the region, also went up by 8.09% to $272 billion in 2016, geared towards the manufacturing sectors. – Anna Gabriela A. Mogato