The United Nations expects Asia-Pacific economies to slow in 2005 in the face of U.S. dollar weakness and uncertainties over oil prices. But U.N. economists are confident China's booming economy will not fall too fast or too hard.
Asia-Pacific growth has been positive through 2004. But Japan's economy, the world's second largest, has been slowing in recent quarters, with the trend forecast to continue through the end of the year.
A report by the United Nations Asia Pacific Economic and Social Commission, issued Monday in Bangkok, predicts that other Asian economies will slow as well in the coming year.
The report predicts "moderate easing" in China, Korea, Taiwan, Malaysia and Thailand, and "more visible slowing" in Hong Kong, Singapore and Japan. India's economy, according to the report, is expected to accelerate.
Kim Hak Su, executive secretary of the U.N. agency, says that despite the predicted slowdown, regional growth in 2005 will remain above the global average, which is forecast to exceed three percent. "As a whole, next year will be weaker in Asia-Pacific region economic outlook - even though the rate, six percent, is very high - from 6.8 or 6.9 percent this year," he said.
Mr. Kim also said the slowdown in China should be moderate and manageable. "China is going to slow down but we all expect not hard landing; but soft landing, gradual change, gradual fine tuning, not far from their expected growth path - around 8.8 percent," he added.
The U.N. report said that recent record-high fuel prices had not yet led to a general slowdown in consumer spending in the region.
It said a major concern is how long fuel prices will remain high, although some economies - such as Indonesia and to a lesser extent Thailand - shield consumers from higher fuel prices through fuel subsidy programs.
Another concern is the sharp drop in the U.S. dollar, which the report said could trigger volatility in financial markets and exchange rates, and could lead to a slowing of Asia's exports to the United States.
Despite a slowing economic pace for the year ahead, Mr. Kim was confident that the Asia-Pacific region remained on target to become the "economic powerhouse" of the world by 2025.