Will developing Asia be able to decouple from a US slowdown? The Asian Development Bank thinks so and, in fact, has just raised its growth forecast for the region. Bloomberg reports:
Asia's developing economies will expand faster than earlier estimated in 2007 and 2008, and are well placed to weather any U.S. slowdown and turmoil in global credit markets, the Asian Development Bank said.
Growth in Asia excluding Japan and Australia is predicted to be 8.3 percent this year, beating a March estimate of 7.6 percent, the Manila-based lender said in a report released in Singapore today. The region will expand 8.2 percent in 2008, faster than an earlier forecast of 7.7 percent, according to the ADB...
The ADB raised its 2007 forecast for economic growth in China to 11.2 percent from 10 percent estimated six months ago. It increased its prediction for expansion in India to 8.5 percent from 8 percent estimated in March.
A US recession, however, is another matter.
Still, the region will not be immune to a U.S. recession...
A recession in the world's largest economy would reduce the Asian region's growth rate by as much as 2 percentage points, the ADB said.
I would think that growth of over 6 percent isn't too bad either, under such circumstances.
Most investors in Asia, however, weren't celebrating the news today. From Bloomberg:
Asian stocks dropped for the first time in five days after the U.S. Justice Department began investigating makers of flash-memory chips and falling crude prices drove down oil producers.