UNCTAD:World economy depends on AEC, Asia

BANGKOK, August 17 (TNA) - The United Nations Conference on Trade and Development (UNCTAD) says that the global economic condition will likely more depend on Asia and the ASEAN Economic Community o(AEC). When delivering a speech at a session organised by the University of the Thai Chamber of Commerce in Bangkok on Friday, themed “New Challenges for Thailand in the New Era of Global Trade and Investment”, UNCTAD Secretary-General Supachai Panitchpakdi acknowledged that the ongoing European debt crisis would limit the world economic growth at only two per cent this year, and that his prediction appears to be different from the US-based International Monetary Fund (IMF), which has forecast that the world economy should grow by four per cent this year. Supachai also cautioned that the eurozone could collapse unless the debt problem of Greece was seriously solved, as the IMF is running out of money, predicting that the eurozone economy should contract by 0.7 per cent this year and 1-1.3 per cent next year. According to the UNCTAD chief, the United States has cut taxes for the rich and has emphasised on financial policies, rather than production; so, the US economy is now highly vulnerable. The UNCTAD secretary-general, who is a former Thai deputy prime minister and a former commerce minister, noted that the world economy would, therefore, depend on savings in Asia, where there are high savings accounting for 60 per cent of global savings, with substantial portions of the Asian savings being in China and Japan. Regarding the upcoming formation of the ASEAN Economic Community (AEC) by 2015, the UNCTAD chief told the session that he was not worried over tax reductions once the Single Economic Community of the Association of Southeast Asian Nations (ASEAN) is formed, but recommending that regulations in the 10-nation grouping be adjusted accordingly, as the world economy would then pin its hope on the AEC. The UNCTAD chief assessed that the Thai baht should not appreciate under the present circumstance, and that the present foreign exchange rates are suitable.(TNA)