The United Nations predicts Asia-Pacific economies will continue to see robust growth in 2008, although a recession in the United States could cause problems for the region. Heda Bayron reports from VOA's Asia News Center in Hong Kong.
The United Nations issued a generally upbeat forecast for the Asia-Pacific region Wednesday, despite concerns that the region's major export market, the United States, is weakening, and even though regional currencies continue to appreciate.
The U.S. economy is expected to slow as it confronts a combination of the effects of last year's home mortgage crisis and rising oil costs, and demand for Asia-made products is expected to slow with it. But the report by UNESCAP says domestic demand can cushion Asian economies from a fall in export revenues.
Shamika Sirimanne, a senior U.N. economist and a co-author of the report, says so far the U.S. sub-prime mortgage problem - which has caused billions of dollars of losses by large banks - has not affected the Asia-Pacific significantly.
However, Sirimanne says that if the U.S. economy goes all the way into recession, Asia would feel the pinch.
"This region is very much an external-oriented region. For example, I think according to our calculations Taiwan, Korea and Singapore are most vulnerable if there is a recession in the United States," said Sirimanne.
The report says China and India's growth rates will continue to remain high and will lead the region. It says China's growth rate is expected to see a moderate decrease this year as Beijing tries to cool its fast-growing economy and as export markets weaken.
"Even though there will be a moderate slowdown in the United States, we still have China growing very, very fast - around 10.8 percent in 2008, India to grow around 9 percent this year. So this will generate an enormous amount of energy in this region," said Sirimanne.
South Korea's economy is forecast to see steady growth although Japan's - the world's second largest economy - is forecast to fall in response to U.S. economic weakness.
The report says developing economies in the region are expected to grow 7.8 percent this year, slightly lower than last year. Indonesia is expected to see strong investment because of lower interest rates and government infrastructure spending.
The report, released Wednesday in Bangkok, raises concerns over rising inflation in China and India, and the environmental degradation it says is undermining the region's growth.
The report says air pollution in major Chinese cities has led to higher incidences of lung disease, including cancer and respiratory problems. An increasing loss of arable land in China - as much as eight million hectares over the past decade surrendered to manufacturing and construction - threatens China's water supply and food security.
The report calls on governments to address environmental problems to ensure longer-term growth.