Growth has held up in developing Asia despite a difficult external environment. The region is expected to grow steadily at 5.7 per cent in 2016 and 2017, the forecasts in this Update unchanged from Asian Development Outlook 2016. While global commodity prices have begun to rebound, inflation remains largely subdued. Consumer prices will likely rise by 2.6 per cent in 2016 and 2.9 per cent in 2017.
Continued slow recovery in the United States, the euro area, and Japan presents a clear downside risk to the outlook. Uncertainty about the path of monetary policy in these economies, and the implications this has for capital flows, complicates macroeconomic management in developing Asia. Policy makers globally need to resist moves toward protectionism that would only undermine the recovery.
By transitioning to low-carbon growth, developing Asia is poised to reap outsized rewards as an essential player in the global effort to contain climate change.
From the early days of seafaring trade, dealing with the weather has been an integral part of doing business. Today, however, concerns over climate change are taking this to a whole new level, and companies will have to adapt to growing regulatory, environmental, and consumer pressures.
One truth is evident across all these industries: companies that ignore climate-related risks are likely to feel the consequences. Those that identify the most pertinent risks, think through how they relate to one another, and then put in place appropriate measures can begin to manage the challenges ahead.
These companies will not only put themselves in position to ride out the storm; they could rise above it.
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