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.