Shouteast Asia boom likely to continue<\/p>\n
SINGAPORE (AFP): The Chinese economy has passed its peak but
\nreal economic growth in Southeast Asian nations will continue to
\naccelerate as inflationary fears in Asia abate, US stockbroker
\nMerrill Lynch says.<\/p>\n
Merrill Lynch said in its latest Asian Economic Commentary
\nthat while it was true China might still be the fastest growing
\neconomy in Asia in 1994, it was \"clearly past the peak in its
\ncurrent business cycle.\"<\/p>\n
\"The next two-to-three years will see some form of
\nconsolidation,\" the report said, adding the only issue unresolved
\nwas whether the Chinese economy would experience a gentle
\nslowdown or a hard landing as in 1989\/90.<\/p>\n
\"If Beijing can maintain its austerity drive for at least
\nanother three to six months, the prospects of a soft landing for
\nthe Chinese economy would increase,\" the report said.<\/p>\n
The report said there was a risk that China might relax its
\ntight monetary and fiscal grip prematurely under mounting
\npressure from ailing state enterprises and cash-starved local
\ngovernment.<\/p>\n
Gross Domestic Product (GDP) growth in China is forecast to be
\n10-to-10.5 percent compared with 13.4 percent last year and 12.8
\npercent in 1992.<\/p>\n
S.E. Asia<\/p>\n
Merrill Lynch said growth in the Southeast Asian economies of
\nIndonesia, Malaysia, the Philippines, Singapore and Thailand, was
\nexpected to accelerate to 7.5-to-eight percent this year and make
\nup for the slack in China.<\/p>\n
Excluding the Philippines, GDP growth in the other four
\nSoutheast Asian countries would be at an even faster rate of
\neight-to-8.5 percent compared with 7.8 percent last year and 6.9
\npercent in 1992.<\/p>\n
Average GDP growth for the top 10 major Asian economies,
\noutside of Japan, is likely to be a relatively strong 7.5-to-7.6
\npercent, almost unchanged from an estimated 7.7 percent last year
\nand 7.4 percent in 1992. The other Asian countries in the review
\nwere Hong Kong, India, South Korea and Taiwan.<\/p>\n
Merrill Lynch said although strong gross domestic product
\ncould produce new demand-pull pressures in the coming 12-to-18
\nmonths, inflation should average no more than five-to-six percent
\nthis year and in 1995 in most Asian economies.<\/p>\n
Even in China, India and the Philippines there were
\nencouraging signs that inflation was now probably close to a peak
\nand price increases should ease in the coming 12-to-18 months,
\nthe report said.<\/p>\n
China was likely to post the highest inflation rate of 16.6
\npercent followed by the Philippines with 10.4 percent.<\/p>\n
On interest rates, Merrill Lynch said increases could be
\nrelatively small.<\/p>\n
It said there were few signs inflation would pose a major
\nthreat to the extent that it would warrant sharply tighter
\nmonetary policies while structural changes in some Asian
\neconomies should keep a lid on interest rates hikes.<\/p>",
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