The optimistic assessment is contained in a year-end update by the flagship report Economic and Social Survey for Asia and the Pacific 2017, released by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) on Wednesday.
However, deepening inequalities and domestic financial vulnerabilities in some economies, along with a high number of climate change-induced natural disasters in the region may overshadow the outlook for economic growth and the prospects for sustainable development, the report warned.
It highlighted the fact that domestic private consumption remained the main driver of economic growth, facilitated by relatively low inflation, low interest rates and robust consumer confidence. Stronger exports also contributed to the recent uptick in economic growth, while the average GDP of developing economies in the region was expected to grow by 5.4 per cent in 2017.
The report cautioned that while the regional economic outlook for 2018 was broadly stable, underpinned by growing domestic and intraregional demand, private investment remained weak in most countries, partly as a result of overcapacity and debt overhang in the corporate and banking sectors of some major economies.
To achieve a stable and sustained economic growth momentum, higher wages supported by productivity gains and a revival of private investment would be needed, the report said.