Asia GDP forecasts cut as U.S. economic beacon dims<\/p>\n
SINGAPORE (Reuters): Economists have pared growth forecasts
\nfor Asia as its number one customer, the United States, takes a
\ncyclical downturn after a decade of growth and as demand for
\nelectronic goods withers in the post-internet-mania era, Reuters
\nlatest quarterly economic survey showed.<\/p>\n
With few exceptions, estimates for 2001 were revised down
\ncompared with a similar survey three months ago.<\/p>\n
The region-wide study of over 120 analysts also showed growth
\nrates are anticipated to be well down on those enjoyed in 2000
\nwhen the economic bounce saw gross domestic product in some
\ncountries getting back to pre-crisis levels, in terms of the
\nheadline numbers at least.<\/p>\n
\"Economic reports and the direction of GDP forecast revisions
\nhighlight that downside uncertainties to the near-term growth
\noutlook remain large,\" said Bernhard Eschweiler, Asia-Pacific
\nhead of economic and market research at JP Morgan.<\/p>\n
\"Recession in the first half of the year is a serious risk for
\nthe United States, Japan, Korea and Taiwan, while a recovery in
\nthe second half of the year is only a forecast.\"<\/p>\n
Since the last poll in December it has become increasingly
\nclear U.S. economic growth is slowing and maybe even grinding to
\na halt. Growth prospects have been pared back pretty much
\nglobally as sliding stock markets strip away the wealth effect on
\nnot only companies, but individuals as well.<\/p>\n
Forecasts for Singapore and Malaysia were pared sharply to 5.3
\npercent and 5.0 percent respectively with slowing demand for
\nelectronic goods curtailing exports and therefore GDP.<\/p>\n
Singapore is coming down from the high base of 9.9 percent
\ngrowth in 2000, with the fourth quarter last year alone showing
\nan 11 percent rise from Q4 1999.<\/p>\n
But the curtain was raised on a soft first half of the year at
\nleast, with a 9.9 percent drop in January's manufacturing output,
\nsignaling coming weakness in the key electronics products sector.<\/p>\n
It is a similar picture in Malaysia where a cooling
\nmanufacturing sector will limit growth as demand for electronic
\ngoods slows further.<\/p>\n
In the June\/July 2000\/01 fiscal year growth forecasts for
\nAustralia were revised back quite sharply to just 2.1 percent,
\nwell down on the previous year's 4.3 percent and way off the
\ngovernment's 4.0 percent expectation.<\/p>\n
Thailand took a hit with growth there this year revised down
\nto 3.5 percent from December's 4.3 percent. Analysts said the
\njury was still out with regard to Prime Minister Thaksin
\nShinawatra's new administration.<\/p>\n
There was broad-based gloom elsewhere with the 3.8 forecast
\nfor Hong Kong not far ahead of the 3.7 percent expected in
\nIndonesia this year.<\/p>\n
\"We are more negative on the trade picture than before,\" said
\nHSBC chief economist George Leung, who recently revised his 2001
\nyear-on-year forecast to 2.2 percent from 3.4 percent.<\/p>\n
\"Originally we thought China would be a strong support to Hong
\nKong but we revised down our (Hong Kong) export numbers in view
\nof poor demand.\"<\/p>\n
The key reason Hong Kong was likely to see any growth at all
\nthis year was because the government plans to spend two percent
\nmore of GDP in fiscal 2001\/02 than in the current fiscal year.
\nHong Kong grew 10.5 percent in real terms in 2000.<\/p>\n
In South Korea, where electronics account for around 35
\npercent of exports, growth is now seen at 4.2 percent this year
\nagainst a previous expectation of 5.0 percent.<\/p>\n
Somewhat ironically the upshot of the political problems that
\nmade the Philippines such an economic pariah at the end of last
\nyear have seen growth expectations for the country improve
\nslightly.<\/p>\n
The ousting of Estrada has led to a more stable peso and
\neconomic variables like interest rates have settled down.<\/p>\n
Analysts are agreed President Gloria Arroyo administration has
\nthus far made the previous administration's efforts look like a
\nbad movie.<\/p>",
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