The annual Asian Development Outlook provides a comprehensive analysis of economic performance for the past year and offers forecasts for the next 2 years for the 45 economies in Asia and the Pacific that make up developing Asia. Despite weak global demand, Asian Development Outlook 2012 expects that developing Asia will largely maintain its growth momentum in the next couple of years, in an environment of easing inflation for most regional economies, although policy makers must be alert to further oil-price spikes arising from threats of oil supply disruptions. The report sees that the greatest risk to the outlook is the uncertainty surrounding the resolution of sovereign debt problems in the eurozone. Still, in the absence of any sudden shocks, developing Asia can manage the effects on its trade flows and financial markets. The theme chapter looks at widening inequality: in spite of developing Asia’s great success in raising living standards and reducing poverty, swelling income disparities threaten to undermine the pace of progress. Regional policy makers need to ensure that the benefits of growth are widely shared.
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