Asian economic outlook dim for 1999: Poll

Asian economic outlook dim for 1999: Poll

SINGAPORE (Reuters): The economic outlook for some of Asia's distressed economies worsened markedly in the past few months, a Reuters poll of more than 100 economists shows.

Analysts have slashed estimates for 1999 gross domestic product growth in Hong Kong, Malaysia and Indonesia, all of which are now expected to show another year of contraction.

And some of the regional economies that have avoided the worst of the Asian crisis -- China, Taiwan, New Zealand and India -- will show less growth next year than analysts expected in the previous Reuters Asia GDP poll, conducted in September.

But the outlook has improved in some of the region's most important economies -- Australia, Singapore and especially South Korea. The Philippines, too, is looking much better than it did three months ago.

Hong Kong is estimated to have lost 5.2 percent of its economy this year and will lose a further 2.2 percent next year, according to the average of economists' forecasts.

Each of those forecasts is half a percentage point worse than the corresponding September outlook.

Malaysia's circumstances have become seriously worse. With GDP expected to show a 6.3 percent contraction in 1998 and another of 0.4 percent in 1999, Malaysia's recession is now seen deeper and longer than before.

The outlook has deteriorated by more than a percentage point in both years.

And while estimates for Indonesia's 1998 GDP have stabilized -- the contraction is now seen at 14.8 percent -- 1999 is now seen much worse, with a further GDP fall of 5.8 percent forecast.

None of the economists who estimated China's GDP growth expected that country to meet the 8.0 percent 1998 forecast that Beijing has nailed to the wall.

But the average analysts' expectation, 7.6 percent, is only a little lower, although the outlook for 1999 growth has been pared to 7.8 percent.

South Korea is showing the most spectacular improvement in economists' forecasts -- the level of GDP in 1999 is now seen only 0.6 percent lower than in 1998, compared with the severe 1.8 percent slump seen three months ago.

Even the disastrous picture for South Korea's 1998 GDP has lightened a little, with analysts forecasting a 6.5 percent drop, compared with the previous outlook of 6.9 percent.

Australia's economy, seemingly impervious to the mess to its north, grew five percent during the year to the third quarter, prompting analysts to upgrade their forecasts for GDP for the fiscal year to June 1999.

GDP for 1998/99 is now seen 3.4 percent higher than the previous full year's, compared with 2.5 percent growth seen a few months ago.

But the poll shows that Taiwan's economy, which also shows no signs of recession, will perform a little less spectacularly than previously expected next year as it posts 4.95 percent growth.

Forecasts for Japan were unavailable.

Economists' average forecasts for 1998 and 1999 GDP growth, compared with September forecasts in brackets (percent change on previous full year):

1998 1999

Australia 3.4 (2.5) 2.5 (2.9)

China 7.6 (7.2) 7.8 (8.2)

Hong Kong -5.2 (-4.7) -2.2 (-1.7)

India 4.8 (5.0) 5.1 (5.6)

Indonesia -14.8 (-14.8) -5.8 (-3.3)

Malaysia -6.3 (-5.1) -0.4 (0.7)

New Zealand -0.7 (0.2) 2.1 (2.6)

Philippines 0.0 (-0.4) 1.2 (0.5)

Singapore 0.9 (0.2) 0.5 (0.1)

South Korea -6.5 (-6.9) -0.6 (-1.8)

Sri Lanka 5.0 (5.1) 5.1 (5.3)

Taiwan 5.0 (4.9) 5.0 (5.2)

Thailand -8.3 (-7.9) 0.4 (0.2)

NOTE: For Australia and India, the figures refer to fiscal years -- 1998/99 and 1999/2000.