Asian Development Outlook 2006 Update
Developing Asia and the Pacific is set to record another good year in 2006. In spite of escalating oil prices, soaring costs of commodity imports, and rising interest rates, growth is projected to be 7.7%, up from 7.6% in 2005. This is higher than the forecast in Asian Development Outlook 2006, released in April this year. Accelerated growth in the People's Republic of China has heavily influenced this revision, as have upgrades to the growth forecasts of the larger South Asian economies. Growth will likely stay robust in 2007 at 7.1%, easing a little from this year as industrial-country demand slows. A key message of the Update is that, to contain future threats to growth, developing Asia should make the necessary adjustments now while domestic and external conditions are favorable. The Update discusses trade issues that may have an impact on developing Asia over the longer term. It also presents a theme chapter on the region's rising influence in world commodity markets. This chapter describes recent trends and sets them in a longer historical perspective, looking ahead to the possible effects on commodity prices of continued fast growth in the region.