Analysis: Asia's economic growth slipping into neutral
By Emily Kaiser, Asia Economics Correspondent
SINGAPORE (Reuters) - Asia's economic growth may be settling into a middling pace that is too slow to provide significant global support but too fast to warrant aggressive policy easing.
Most of the region's emerging economies have space to cut interest rates or boost government spending to counter the impact from the global slowdown.
That's in sharp contrast to the developed world where the United States, Britain, Japan and others have long since pushed benchmark borrowing costs down to near zero, while swollen budgets provide little scope for stimulus.
But the latest batch of economic data out of Asia showed growth was not slowing quite as precipitously as many economists had feared. This bolsters the wait-and-see case, particularly when the biggest economic threat -- Europe's debt crisis -- is so difficult to predict.
"The data still suggests that we're losing momentum, but we're not losing momentum in a rapid deterioration that requires immediate action," said Claudio Piron, emerging Asia rates strategist with Bank of America-Merrill Lynch.
Take China's fourth-quarter growth figures, for example. Although the year-on-year rise of 8.9 percent was the slowest since mid-2009, it was still a bit stronger than economists polled by Reuters had predicted.
In India, a measure of factory activity picked up far more than expected in December, alleviating fears that the economy was unraveling. Yet gross domestic product growth has slowed dramatically and is likely to worsen in the current quarter.
Singapore's non-oil exports surged 16.4 percent in December, more than four times the consensus forecast in a Reuters poll. But economists still think the city-state is slipping into at least a brief recession. Continued...