06-08-2013, 10:08 PM
A contrarian view...
Heading off the next Asian crisis
After the global financial crisis, Asia grew at more than 6 per cent each year, outperforming a troubled world. Not just China moreover, but also India, South-east Asia and others. While the United States and Europe floundered, the gravity-defying feat substantiated the idea of Asia’s rise to close the gap with developed economies.
Now, gravity seems to be catching up with Asians.
Growth in China has slowed as the new leadership rejigs policies to discipline credit and spending — much-needed reform to cut wasteful projects and secure the financial system. The government targets 7.5 per cent growth. Still good, but a far cry from the days of double-digit rates.
Indian expectations are even lower after visible missteps combined with a current account deficit of around 5 per cent of gross domestic product (GDP). Spooked investors and capital outflows have led to the rupee tanking.
Similar symptoms show in Indonesia with the current account deficit shooting past 3.5 per cent of GDP in the second quarter. In past weeks, the rupiah has fallen below the psychological threshold of 10,000 to the US dollar even as officials offer reassurance.
http://www.todayonline.com/commentary/he...ian-crisis
Heading off the next Asian crisis
After the global financial crisis, Asia grew at more than 6 per cent each year, outperforming a troubled world. Not just China moreover, but also India, South-east Asia and others. While the United States and Europe floundered, the gravity-defying feat substantiated the idea of Asia’s rise to close the gap with developed economies.
Now, gravity seems to be catching up with Asians.
Growth in China has slowed as the new leadership rejigs policies to discipline credit and spending — much-needed reform to cut wasteful projects and secure the financial system. The government targets 7.5 per cent growth. Still good, but a far cry from the days of double-digit rates.
Indian expectations are even lower after visible missteps combined with a current account deficit of around 5 per cent of gross domestic product (GDP). Spooked investors and capital outflows have led to the rupee tanking.
Similar symptoms show in Indonesia with the current account deficit shooting past 3.5 per cent of GDP in the second quarter. In past weeks, the rupiah has fallen below the psychological threshold of 10,000 to the US dollar even as officials offer reassurance.
http://www.todayonline.com/commentary/he...ian-crisis