BANGKOK – Uncertainty and volatility have quickly become the “new normal” of the global economy. For several reasons, this turbulent external environment poses the most significant threat to Asia-Pacific growth in 2012.
One of this environment’s main features is the ongoing weakness of major developed economies. The expected V-shaped global recovery, from the depths of the 2008 financial crisis, proved short-lived. The world economy entered a second stage of crisis in 2011, owing to eurozone’s sovereign-debt crisis and continuing uncertainty about the economic outlook for the United States.
Mapping the landscape of these threats, forecasting their impact, and presenting a range of policy options to help countries to ensure inclusive and sustainable growth despite the uncertainty, is the focus of the United Nations’ 2012 Economic and Social Survey of Asia and the Pacific.
Our forecast is that persistent headwinds will slow Asia-Pacific economic growth to 6.5% this year, down from 7% in 2011. Reduced demand for regional exports and higher costs of capital, combined with loose monetary policies and trade protectionism in some advanced economies, will contribute to the slowdown.