Deutsche Bank predicts Asia sharp acceleration<\/p>\n
Reuters, Singapore<\/p>\n
Deutsche Bank's Asian chief economist, Michael Spencer, staked
\na claim to having the region's most optimistic growth forecasts
\non Tuesday arguing for a sharp acceleration beginning later this
\nyear and extending into 2003.<\/p>\n
\"U.S. and EU recovery early this year will add to domestic
\ndemand to bring surprisingly strong growth in Asia this year,\"
\nSpencer told a seminar of bankers and investors.<\/p>\n
\"We have forecasts of 6.5 percent growth in Korea this year,
\nfive percent in Malaysia and 4.5 percent growth in Singapore,\"
\nSpencer said.<\/p>\n
The South Korean government expects four percent economic
\ngrowth this year, Malaysia is currently forecasting around three
\npercent and Singapore's official forecast is for between minus
\ntwo and plus two percent change in gross domestic product (GDP).<\/p>\n
\"For half of the countries in the region we have the strongest
\nforecast on the Street,\" Spencer said.<\/p>\n
Expansionary fiscal policy and looser monetary policy will
\ncontinue to support growth in the region in the first half of
\n2002, Spencer argues, then a pick up in the United States and
\nEurope will begin to drive demand for Asian exports.<\/p>\n
This external demand will in turn add a further boost to
\ndomestic consumption and investment culminating in a very strong
\ngrowth outcome next year.<\/p>\n
\"We expect to see a sharp increase in GDP growth in Asia next
\nyear,\" Spencer said.<\/p>\n
The Deutsche Bank economist dismissed concerns that China's
\nentry into the World Trade Organization would harm the region.<\/p>\n
\"Our analysis suggests that most Asian countries will benefit
\nfrom China's opening-up, if they allow investment to be dictated
\nby comparative advantage. India, Indonesia could be the big
\nlosers though,\" Spencer said.<\/p>\n
The biggest risk to the positive outlook for the region was
\nJapan where any political or economic crisis could change the
\noutlook mainly through its impact on U.S. and European growth.<\/p>\n
Peter Redward, Deutsche Bank's Asian currency strategist
\nargued for a similar positive view on the outlook for the
\nregion's currencies, especially against the U.S. dollar.<\/p>\n
\"We expect Asian currencies to outperform the Japanese Yen in
\nearly 2002, strengthening against the U.S. dollar as the year
\nprogresses,\" he said.<\/p>\n
The currencies are all likely to benefit from high levels of
\nforeign exchange reserves and positive current account balances.<\/p>\n
The key risk is a further weakening in the value of the yen
\nbut its impact on Asian currencies depended on the pace of the
\nfall. Deutsche Bank is currently forecasting a 140 yen to the
\ndollar rate in 12 months compared with around 131.25 on Tuesday.<\/p>\n
\"In the short term Yen weakness will continue to pressure
\nAsian currencies,\" Redward said.<\/p>\n
For the Singapore dollar the Bank is forecasting a rate of
\n1.74 to the U.S. dollar in 12 months against 1.83 today.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/deutsche-bank-predicts-asia-sharp-acceleration-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}