The Asian Development Bank predicts that growth in East Asia's emerging economies will be moderate because of spiraling inflation and rising gas prices in Vietnam. Claudia Blume in Hong Kong has more on these and other stories in our weekly look at business news from the Asia-Pacific region.
Growth in East Asia's emerging economies will slow to 7.6 percent in 2008 and 2009, down from an average growth of nine percent last year. A report by the Asian Development Bank says the slowdown is mainly caused by a sharp rise in food and energy prices, as well as volatility in global financial markets.
The Manila-based lender says China's economic growth will slow to 9.9 percent this year, down from almost 12 percent last year. The ADB expects inflation in the region to rise to 6.3 percent, more than double the average rate of the past ten years.
Vietnam has one of the highest inflation rates in Asia. In July, consumer prices went up 27 percent, the highest inflation rate in almost two decades. The price of the country's staple food rice and other grains went up more than 70 percent.
Vietnam raised gas prices by more than 30 percent last week, to about one dollar and 12 cents per liter, which puts prices in line with the rest of Asia. The move is likely to accelerate inflation even more. The price rise came as a shock to many Vietnamese consumers, as the government had promised in early July to leave prices unchanged until the end of the year.
After a five-year delay, a new terminal at the international airport of the Philippine capital Manila finally opened. The $600 million terminal was completed in 2003 by a consortium led by Germany's Fraport company. But it never opened because of legal disputes about contracts. The government took over the building but the opening was delayed because Fraport sued Manila for expropriation without compensation. Last year, the World Bank's arbitration court dismissed Fraport's claim.
At the moment, only domestic budget airlines can take off from Terminal 3 of Ninoy Aquino International Airport. Airport authorities say it will be fully operational for both domestic and international flights next year.
Tirso Serrano, assistant general manager of the terminal, says he is confident that although the facility is not yet 100 percent complete, passengers will be able to travel hassle-free.
"We have been able to smoothen out the rough edges and the glitches that we have observed for the past simulation runs and this has brought us really to a higher level of confidence that the sectors that we are opening up for passenger traffic are indeed safe," he said.
On the upside, Japanese automaker Honda reported a higher-than expected net profit of $1.7 billion for the first fiscal quarter, which ended in June. This was an increase of more than eight percent compared to the same period last year. Sales growth in new markets such as China and Brazil made up for decreased auto sales in the United States, Europe and Japan.