Asia-Pacific to outpace the world economy in next 5 years
Asia-Pacific to outpace the world economy in next 5 years
Agence France-Presse, Singapore
The Asia-Pacific region will outpace the rest of the world economy in the next five years with an annual average growth rate of 5.5 percent, the Economist Intelligence Unit (EIU) said Thursday.
China and India -- the region's most populous nations -- will be among the best performers, the EIU said.
However, the pace of regional growth will be slower compared with the boom years preceding the 1997-1998 regional financial crisis, it said.
In Southeast Asia, Vietnam is likely to be the star performer with growth of nearly 7.0 percent.
In the wider Asian region, the economic expansion is seen higher than in other emerging regions, largely owing to the performances of mainland China and India.
GDP growth in China will average just under eight percent, similar to the rates in the previous five years.
"Export volumes seem to be expanding rapidly despite the sluggishness of the global economy. Domestic demand growth is being driven primarily by government investment," it said.
Hong Kong's fortunes will remain tied to the international trade cycle, with GDP growth this year seen at a "disappointing" 2.5 percent.
"Over the long term, however, Hong Kong will benefit from China's accession to the WTO (World Trade Organization), which will help the expansion of its export markets," it said.
India's growth is forecast at 5.5 percent this year, due to the effects of the poor monsoon rains on the agricultural sector.
Medium-term growth is seen between six and seven percent, which is rapid by global standards but below the eight and nine percent growth seen as necessary to reduce poverty levels.
South Korea, one of the countries hardest hit by the 1997-1998 crisis, is expected to expand at an average rate of 4.5 percent in the next five years, with growth seen strongest at 5.4 percent in 2003.
Malaysia and Singapore, which are highly reliant on exports, will continue to track trends in global trade.
A weakening in U.S. demand, which held back growth in 2002, will continue to weigh on both economies this year, when GDP is forecast to expand 4.5 percent in Malaysia and 3.7 percent in Singapore.
"Both will accelerate to about 4.5-5.0 percent in 2004 as U.S. import demand picks up," the EIU said.
Thailand's GDP should grow 3.7 percent in 2003 and 4.3 percent in 2004. While export growth will remain subdued in 2003, a easing in monetary policy will help boost consumption and investment.
Indonesia will continue to suffer from the fallout of the Oct. 12 terrorist bomb attack in Bali, with GDP seen growing just 3.4 percent this year.