United Nations, May 1 (IANS) The UN on Monday warned that the rise in protectionism put economic growth in Asia Pacific at risk and urged countries in the region to improve governance and fiscal management to bolster development.
Unveiling its annual report on economic and social outlook, the UN Economic and Social Commission for Asia and the Pacific (ESCAP) highlighted the increase in growth outlook for the next two years, Efe news reported.
According to the report, the Asia-Pacific region, including countries like China, India, Japan, Australia and South Korea, would see growth ranging from 5 to 5.1 per cent in 2017 and 2018.
Even though the numbers signified “modest” economic growth compared to the recent historical trend, the report said they were still above the 4.9 per cent growth achieved in 2016.
The UN report highlighted that global uncertainty – brought about by economic policies of several developed nations such as the introduction of Non-tariff measures (NTMs) – posed threats for the Asia-Pacific region.
Rising trade protectionism was the most significant risk to the overall economic outlook, said the study, with the US policy change and the UK’s exit from the European Union.
ESCAP added that the rise in free trade barriers could slow down the estimated growth rate of developing countries in Asia-Pacific by 1.2 per cent.
The study projected China’s mild downward economic trend, putting the country’s growth at 6.5 per cent in 2017, compared to 6.7 per cent in 2016.
Despite predicting overall regional moderate economic growth, the study expected an economic stability in China as the government introduced reforms to favour establishment of sectors with greater value addition.
The report predicted that domestic consumption would continue to be the main driving force of the region’s economy, owing to the fall in exports and private investment triggered by the 2008 global financial crisis.
ESCAP called for the developing Asia-Pacific economies to improve governance and fiscal management, in order to increase its growth outlook and to combat rising inequalities and environmental degradation.
“Sustained productivity gains, in turn, will require effective institutions and better governance, in both public and private spheres,” said ESCAP Executive Secretary Shamshad Akhtar.
The study found that inequalities rose as poverty reduction pace slowed in countries with weak institutions.