ASEAN growth to decelerate by 0.5%: Survey

JAKARTA (JP): The economic growth of the Association of Southeast Asian Nations (ASEAN) is expected to slow down by 0.5 percentage points in the next two years due to the contractive policies being pursued by a number of its members in an effort to tackle overheating, a UN survey said.

"In 1996 and 1997, the economic growth of Southeast Asia is expected to decelerate by 0.5 percentage point to an average of 7.6 percent," said Prabowo, an analyst of the Economic and Social Commission for Asia and the Pacific (ESCAP) of the United Nations.

He made the comments introducing an economic and social survey of the Asia-Pacific 1996 here yesterday.

He said that the annual ESCAP survey predicts that economic growth in the region will range between 7 and 10 percent per annum during the next two years.

According to the survey, the economic growth of Southeast Asian region last year was 8 percent, up slightly from 7.9 percent in 1994.

Last year's slight improvement reflected a moderate acceleration of growth in Malaysia, the Philippines, Thailand and Vietnam and some deceleration in Indonesia and Singapore.

Prabowo, who is also a member of the executive board of the Indonesian Economists Association (ISEI), noted that Indonesia's economy is expected to grow by 7 percent this year and 7.2 percent next year.

He told reporters that Indonesia during the next two years will be preoccupied with the problems of inflation and the increasing current account deficit resulting from growing imports.

"I think sharpening our competitive edge is the only way to tackle the rising current account deficit," he noted.

He added that Indonesia should complement its deregulation and liberalization with an effective competition policy to protect its economy and the public from various forms of market abuse.

East Asia

In East Asia, according to the survey, the economic growth of China slowed from 11.8 percent in 1994 to 10 percent in 1995, and that of South Korea accelerated from 8.4 percent to 9.3 percent, while that of Hong Kong remained stable at 5.5 percent. Mongolia's economy accelerated from 2.1 percent to 3.5 percent.

In South Asia, average economic growth accelerated somewhat from 5.1 percent in 1994 to 5.5 percent last year. Further acceleration to 6 percent is expected this year and next. This growth is due to the economic reforms recently introduced by countries in the region.

The survey also noted that economic growth in the Asia-Pacific will decelerate from 7.8 percent last year to 7.4 percent this year and 7.2 percent next year.

"But it is still higher than the world's average growth of 2.6 percent last year and 3 percent this year and next," said the survey.

The survey attributes the economic slowdown to the restraints being used in a number of the fast growing economies to prevent economic overheating. (13)