Asian economies sailing in rough waters

ASIAN economies are sailing in choppy waters, facing severe headwinds from an uncertain and challenging global environment. First, the global recovery has been uneven and weaker than expected. On top of that, global trade has been sluggish and financial conditions have been volatile.

The rise of China as a global economic superpower has also created challenges of its own, as China's necessary rebalancing from manufacturing towards services and investment to a consumption-driven economy - critical for both China's and global growth over the medium term - remains bumpy.

As elsewhere, many Asian economies face risks associated with natural disasters and geopolitical and domestic political uncertainty. But all is not the doom and gloom, as Asia remains the major engine of the global economy: it continues to provide nearly two-thirds of global growth. In addition, the region has policy buffers such as current account surpluses and high reserve levels and is likely to benefit from further economic integration and regional and multilateral trade agreements such as the Trans-Pacific Partnership.