Super normal growth in Asia ends: Report<\/p>\n
SINGAPORE (AFP): East and Southeast Asian economies will
\noutperform the rest of the world in 1997 on the back of robust
\ninvestments and exports, but their days of \"super normal\" growth
\nare over, a report said Thursday.<\/p>\n
In its latest quarterly economic review, SocGen-Crosby
\nSecurities Pte. Ltd. also forecast a selective easing of tight
\nmonetary policies in the region which have contributed to a
\nreduction of overheating concerns.<\/p>\n
\"We believe recent fears about sustainability of high growth
\nprospects for East and Southeast Asia have been vastly over-
\nexaggerated and that, conversely, we expect GDP growth to pick up
\nacross the region in 1997..,\" the report said.<\/p>\n
SocGen-Crosby, an affiliate of French banking group Societe
\nGenerale and Britain's Crosby Securities, forecast gross domestic
\nproduct growth of 10.5 percent and 11.0 percent for China in 1997
\nand 1998, respectively.<\/p>\n
It predicted 5.4 percent and 5.8 percent growth for Hong Kong
\nin the two years, 7.3 percent and 6.8 percent for Singapore and
\n7.5 percent and 5.4 percent for Malaysia.<\/p>\n
The report foresaw 7.6 percent and 7.8 percent growth for
\nThailand over the same period, 8.1 percent and 8.3 percent for
\nIndonesia, and 5.6 percent and 5.8 percent for the Philippines.<\/p>\n
The securities house said the region would outperform other
\nparts of the world economy, but added: \"The days of super normal
\ngrowth are over -- especially for Southeast Asia -- these
\nregional economies will generally grow at between seven percent
\nand eight percent per annum.\"<\/p>\n
The 7-to-8 growth, however, was \"entirely satisfactory\"
\nbecause continued double-digit growth would lead to inflationary
\npressures especially as labor markets tighten, it said.<\/p>\n
Asia's economic growth slowed in 1996, with exports
\nconsiderably lower in almost every case, leading some analysts to
\nquestion whether the regional economic miracle was over.<\/p>\n
The cyclical decline was partly due to an electronics slump.
\nSocGen-Crosby said export momentum was poised to pick up, with
\nthe inventory correction having ended and the world economic
\nenvironment improving, while investments still remain at \"very
\nhigh levels\" of up to 40 percent of GDP.<\/p>\n
\"The investment surge over the last few years, in terms of
\nvery high approvals and applications numbers, is now being
\ntranslated into actual construction and investment growth in the
\nreal economy..,\" the report said.<\/p>\n
Investments in infrastructure programs are picking up and
\n\"these will have important effects for potential GDP growth.\"<\/p>\n
SocGen-Crosby argued that the appreciation of the U.S. dollar
\nagainst the yen over the past 18 months had reached a peak and
\nwould soon be reversed, boosting Asian export competitiveness. It
\nforecast that the dollar would decline to the 102-to-108 yen
\nlevel in 12 months.<\/p>\n
Inflationary pressures throughout the region were lower, a
\nresult of tight monetary policies, but continued high investment
\nimplied that \"policy would be directed at preventing excess
\nconsumption pressures,\" the report said.<\/p>\n
\"This will mean that tight monetary policies will only be
\nselectively eased,\" it said.<\/p>\n
SocGen-Crosby said East and Southeast Asia were in a period of
\nadjustment as factors responsible for previous years of very high
\ngrowth change, posing the challenge of promoting high value-added
\nsectors.<\/p>\n
\"Like in any transition period, there are difficulties as old
\nsectors decline faster than new sectors develop,\" the investment
\nhouse said.<\/p>\n
It cited the example of Thailand, where new capital-intensive
\nsectors are prospering amid a \"precipitous decline\" in the export
\nperformance of more labor-intensive industries.<\/p>\n
The report also said over-supply was becoming evident in a
\nnumber of sectors such as property and retail in Thailand,
\nMalaysia, Indonesia and to some extent Singapore, while Malaysia
\nis also faced with over-capacity in manufacturing.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/super-normal-growth-in-asia-ends-report-1447893297",
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