Asia projected to post moderate to strong economic growth
Asia projected to post moderate to strong economic growth
SINGAPORE (AFP): Most Asian nations are expected to post
moderate to strong economic growth in 2000 as they consolidate
their recovery from the financial crisis which erupted in mid-
1997, a conference was told Thursday.
But private economists at the forum warned that high economic
growth rates alone were not the sole benchmark for progress, as
demonstrated by the crisis' exposure of policy flaws in the
region despite runaway growth.
"Achieving a sustainable recovery is more than simply looking
at the growth trend," cautioned Chalongphob Sussangkarn,
president of the Thailand Development Research Institute.
"The mistake before the crisis was that past growth generated
too much optimism about future growth prospects, to the point of
turning attention away from factors that could bring about a
crisis," he told the conference organized by Singapore's
Institute of Southeast Asian Studies.
Nearly all nations in the region were plunged into recession
in 1997.
Chalongphob forecast Thailand's economy would expand close to
five percent in 1999 and record a growth rate of close to or
slightly lower than that for 2000.
Hadi Soesastro, executive director of the Jakarta-based Center
for Strategic and International Studies, told the forum that
Indonesia could expect a modest recovery in 2000 with growth of
about three to four percent.
More optimistic projections have suggested a growth rate of
four percent or more.
Soesastro said despite the recovery, it would be difficult for
the government to maintain an inflation rate of below five
percent. He forecast an inflation rate of below 10 percent.
Indonesia's economy contracted by nearly 14 percent in 1998 at
the peak of the financial crisis. Authorities have projected
gross domestic product (GDP) movement for 1999 of between plus
and minus one percent.
Hitoshi Okuda, managing director of Nomura Research Institute,
said the Japanese economy would have grown 0.5 percent in 1999
after adjusting for inflation and forecast a growth of 0.7
percent in 2000.
"We believe that it will take some more time to see strong
sustainable growth. The worst period has been over but there are
many structural obstacles to tackle before we will see
sustainable recovery," he said.
Okuda forecast 1.2 percent growth in 2001.
Economists with the Malaysian Institute of Economic Research
(MIER) told the conference that Malaysia was undergoing a broad-
based recovery which had increased the chances of sustaining the
growth path.
"The outlook for 2000 appears to be bright as the external
demand, especially for electronics, was expected to be
maintained," said Mohamed Ariff, MIER's executive director.
He forecast Malaysia's GDP growth to be at 4.8 percent in 1999
after a deep contraction of 7.5 percent a year before.
Growth would accelerate further to 5.3 percent in 2000, driven
by the recovery in private sector investment and sustained
external demand, Mohamed said.
Edward K. Y. Chen, president of Lingnan University in Hong
Kong, said China, which went through tough times as it prevented
a devaluation of its currency to help the rest of Asia recover
from crisis, had slammed the brakes on deflation.
He said China grew at a slower rate of 7.1 percent in 1999 but
could chalk up 7.0 to 7.5 percent growth in 2000.
"A major factor in supporting China's growth in the coming two
to three years would be the 'psychological' effects of China's
entry into the World Trade Organization," Chen said.
South Korea, which recovered faster than expected mainly due
to comprehensive reforms as mandated by an International Monetary
Fund's bailout package, expects slower growth of 7.2 percent in
2000 from an estimated 10.2 percent in 1999, said Chhong Yong
Ahn, a senior don at Seoul's Chung-Ang University.