East and South Asia leading recovery of world economy from recession, UN

Press conference to launch new report at 2:30 p.m. on 20 January at FCCT

Governments in East and South Asia undertook aggressive monetary and fiscal measures to respond to the global economic crisis of the last two years, resulting in both regions leading the world’s recovery out of recession, according to a new United Nations report.


The “World Economic Situation and Prospects” (WESP) projects East Asian economic growth of 6.7 per cent this year, the highest among all regions of the world, and South Asian economies coming in second with an expected growth of 5.5 per cent.

Both regions are rebounding from weak – but not calamitous – growth rates last year: East Asia recorded a rise of 4.3 per cent in 2009, following 6.3 per cent in 2008 and 9.3 per cent in 2007. In South Asia, the comparable rates were 4.1 per cent in 2009, 6.2 per cent in 2008 and 9.6 per cent in 2007. Each region’s 2007 growth rate was its highest for the entire decade beginning in 2000.

Tiziana Bonapace, Chief of the Macroeconomic Policy and Analysis Section at the UN Economic and Social Commission for Asia and the Pacific (ESCAP), will introduce the report along with Aynul Hasan, Chief of the Development Policy Section at ESCAP, at a press conference at 2:30 p.m. on Wednesday, 20 January at the Foreign Correspondents’ Club of Thailand (FCCT) in Bangkok.

The WESP warns that the mild global recovery projected in the baseline outlook is subject to high risks and uncertainties, mainly on the downside.

The first is the risk of a premature “exit” from the stimulus measures in the major economies which could abort the still nascent recovery. The second relates to the risk of a re-emergence of the global macroeconomic imbalances which were part of the problem in the first place and could erode confidence in the United States dollar. These risks could become sources of renewed instabilities and cause a double-dip global recession which would affect the countries in East and South Asia given their dependence on world trade and finance.

While recognizing the important steps taken by the G20, the UN report calls for more intensive and inclusive international macroeconomic policy coordination. It also calls for deep systemic reforms in financial regulation and the global reserve system to ensure a more balanced and sustainable path of global economic growth.