Asian growth forecasts cut as downturn bites

Asian growth forecasts cut as downturn bites

SINGAPORE (Reuters): The moribund global economic outlook and
in particular the U.S. slowdown has seen economists lop sizable
chunks off this year's growth forecasts for Asia's regional
economies.

Of the 13 countries surveyed in the latest quarterly Reuters
economic survey, 11 had growth forecasts pared back compared with
a similar survey three months ago.

Around 126 banks, investment houses and economic analysts were
surveyed by Reuters bureau around the region last week.

Almost to a man, economists cited the global economic slowdown
as the major negative for export dependent Asia, although a
slower than expected pick-up in domestic demand, as unemployment
stays high and political uncertainty threatens stability at home,
was also a major factor.

Last month the U.S. surprised with a downward revision to
first quarter growth to 1.3 percent from a previous estimate of
2.0 percent as companies slashed inventories at the fastest pace
in 18 years.

The survey was conducted before Japan's Q1 GDP numbers on
Monday which surprised on the downside with a 0.2 percent
quarter-on-quarter fall compared with expectations for a similar
sized rise. Another contraction looks almost certain and two
negative quarters will mean Japan is in a technical recession.

Growth forecasts for Taiwan this year were savagely cut back
to 2.9 percent, well down on the March survey of 5.0 percent.

Singapore also had growth forecasts cut back sharply to 3.6
percent this year against 5.3 percent in the previous survey.

Malaysia with its capital controls grew a strong 8.5 percent
last year but forecasts for 2001 have been scaled back to just
3.6 percent from 5.0 percent in the previous survey.

Even Hong Kong is still unable to flex its wasted economic
muscles with some economists predicting total exports could
register zero year-on-year growth for the whole of this year.

This year's growth forecast was cut back around 26 percent
from the March survey to 2.8 percent.

Forecasts for Thailand have been scaled back to 2.8 percent
this year, close to the lower end of the Thai central bank's own
estimate of 2.5-3.5 percent.

On top of the export slowdown, Thailand is also being hurt by
uncertainty over interest rate policy after the sacking of
central bank chief Chatu Mongol Sonakul after a row over monetary
policy.

This year's forecast for the Philippines was pared back to 2.8
percent from 3.3 percent with the global slowdown for electronic
components, which account for close to 50 percent of total
exports, taking its toll.

Indonesia's chronic political uncertainty saw the 2001 growth
forecast cut to 3.4 percent from 3.7 percent, but analysts were
hopeful the political scene would settle down later this year and
allow the economy to grow at a slightly better pace in 2002.

At 4.1 percent for this year South Korea did not suffer as big
a downward revision as many others because of faint signs of
improved domestic spending and an expectation of a consumption-
led recovery in the second half.