East Asian GDP to rebound: ADB<\/p>\n
Cecil Morella, Agence France-Presse, Manila<\/p>\n
Sluggish East Asian economies should improve in the second
\nhalf, helped by a short-term easing of fiscal and monetary
\npolicies after the Iraq war and SARS outbreak, Asian Development
\nBank (ADB) chief Tadao Chino said Tuesday.<\/p>\n
A better outlook for developing East Asia's major trading
\npartners should also help it post 5.5 percent growth this year,
\nthe head of the Manila-based bank said.<\/p>\n
Except for China and Thailand, economic growth in the region
\nslowed amid global uncertainties in the three months to March.
\nThe Severe Acute Respiratory Syndrome (SARS) epidemic in the
\nsecond quarter made it worse, he said in a statement.<\/p>\n
Since then, \"some key developments including those in recent
\nweeks give room for optimism that East Asia's growth should pick
\nup in the second half of this year, and strengthen further next
\nyear.\"<\/p>\n
Chino said \"strong actions by governments both in the region
\nand worldwide\" had curbed the SARS outbreak.
\nIf the disease stays under control, \"the adverse economic impacts
\nof SARS should turn out to be moderate reducing growth of
\ndeveloping Asia by 0.1 to 0.2 percentage points in 2003.\"<\/p>\n
Economic growth in the United States, a key trading partner,
\nshould pick up in the second half amid interest rate cuts, more
\nrobust consumer spending, and strong stock market rallies
\nworldwide, he said.<\/p>\n
There was also improved business sentiment in Japan.<\/p>\n
He praised East Asia's \"significant progress in implementing
\nreforms, particularly in addressing weaknesses in the financial
\nand corporate sectors\", leading to lower bad loan ratios and
\nimproved capitalization.<\/p>\n
But the first half slowdown \"will pull down growth for the
\nyear as a whole. Therefore, East Asia is now forecast to grow by
\n5.5 percent this year compared with 6.6 percent last year.\"<\/p>\n
Most countries would register lower growth this year -- from
\njust over 2.0 percent in Singapore, about 4.0 percent in
\nIndonesia, South Korea, Malaysia, the Philippines and Thailand,
\nand 7.2 percent in China, he said.<\/p>\n
For 2004, \"we expect East Asia to achieve an average growth of
\n6.3 percent. Growth next year should be higher than this year in
\nalmost every country in the region, ranging from about four
\npercent in Indonesia and the Philippines to 7.5 percent in
\n(China), with most other countries expected to post growth above
\nfive percent.\"<\/p>\n
But \"any increase in geopolitical risks could heighten
\nuncertainty among consumers and investors,\" while \"the large
\nimbalances in the industrial economies remain a risk to the
\nglobal economy and the region.\"<\/p>\n
Chino said the emerging economic picture in East Asia \"calls
\nfor a two-pronged economic policy response at least for some
\ntime: first, monetary and fiscal loosening where there is scope;
\nand second, expeditious completion of the restructuring and
\nreform agenda.\"<\/p>\n
He said there was ample room for monetary and fiscal easing
\nbecause the region \"has excess production capacity in many
\nsectors, low inflation, a robust balance of payments, and
\nsizable foreign exchange reserves.\"<\/p>\n
\"It is encouraging that, partly in response to the SARS-
\ninduced slowdown in growth, several countries in the region have
\nrecently announced fiscal stimulus packages.\"<\/p>\n
Chino also warned, \"Although the worst of the SARS outbreak
\nappears to be over, countries should remain vigilant and continue
\nto take preventive measures against its recurrence.\"<\/p>",
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