ADB president predicts moderate 2002 rebound for East Asia

ADB president predicts moderate 2002 rebound for East Asia

Sarah Stewart, Agence France-Presse, Yangon

East Asia is heading for a moderate rebound in 2002 as the global economy improves faster than anticipated after the September 11 attacks, Asian Development Bank (ADB) president Tadao Chino said Saturday.

Chino told an Association of Southeast Asian Nations (ASEAN) finance ministers meeting that the impact of the terrorist strikes and the resulting Afghan conflict had been less harmful than expected.

"There is a growing consensus that the region will experience a moderate rebound this year, in contrast to the gloomy picture one foresaw in the immediate aftermath of the 11 September attacks," he said.

"Going forward, this year's moderate rebound in the region's growth is expected to strengthen in 2003."

Pointing to rising stock markets and signs that exports and domestic demand are picking up, the ADB president said the upturn may already be under way.

Chino said that last year's synchronized slowdown among industrialized nations and the collapse of the technology sector had caused a significant drop in demand for the region's exports.

Governments and central banks responded to the external shock, their second in half a decade, with sound fiscal and monetary policies that represented a "coordinated regional policy response".

But the terrorist attacks on the United States then introduced another hurdle that prompted the ADB to predict at the time that a regional rebound would only occur in mid-2002.

Since then, however, global and regional developments have given cause for optimism about the region's immediate prospects, Chino said.

"First, the impact of the Sept. 11 attacks have turned out to be less disruptive than expected."

"Second, data and information released in the last few months, especially in the past few weeks, show distinct signs of improvement in the global economic situation."

Chino said the U.S. economy seems to have bottomed out and is recovering faster than anticipated. Europe is set for a milder rebound and there are recent positive signs in Japan even though recession persists there.

"These developments augur well for East Asia. East Asia seems to be moving from last year's sharp synchronized slowdown to a faster-than-expected -- but a moderate -- rebound," he said.

At the conclusion of their two-day meeting here, ASEAN finance ministers said they expected the region to grow at 3.5-4.0 percent this year, bolstered by global recovery and efforts to integrate member nations' economies.

"This is based on the projected recovery of the global economy, our sound domestic macroeconomic policies and ongoing structural reforms, and the closer economic cooperation that ASEAN has fostered," they said in a statement.