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Asia Minute: Asia Development Bank Warns of Further Regional Slowdown

Wikipedia Commons
Wikipedia Commons

China’s President is in Washington State today and the Prime Minister of India will be in New York tomorrow.  But the leaders of both countries got some troubling news this week from the Asian Development Bank—which says growth in Asia’s two most populous countries continues to slow. HPR’s Bill Dorman has more in today’s Asia Minute.

The 7% solution may not be working for China’s economy.

The government still officially expects growth of “about” 7% this year - but the Asian Development Bank has cut its forecast to a little below 7% - even lower next year.  The ADB also cut its expectations for India --to a growth rate of a little less than 7.5%.  Both scenarios match or come very close to the forecasts of the International Monetary Fund, and that’s not a hopeful sign for the rest of Asia.

This week, economic worries have pestered global stock markets—as well as commodity markets.  Futures prices of industrial metals have tumbled—including copper, aluminum, nickel and lead.  And while it’s not likely to produce screaming headlines, the price of zinc quietly hit its lowest level in more than five years this week.

Part of that may be technical—related to inventory build-up in warehouses.  But if you want to worry about something, think about this: zinc is used for rustproofing steel.  That steel can wind up in products from auto bodies to building frames and other construction material.  A slowdown in demand for that zinc may not quite be a canary in the coal mine of the global economy, but for the two most populous countries in Asia, it’s definitely not a positive sign.

Bill Dorman has been the news director at Hawaiʻi Public Radio since 2011.
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