East Asian economy forecast to grow 5.8 percent in 2003

East Asian economy forecast to grow 5.8 percent in 2003

Agence France-Presse, Tokyo

East Asian economies, excluding Japan, are forecast to grow
5.8 percent in 2003, the same rate as this year, as brisk
investments offset slumping exports, a government-run trade body
said here Wednesday.

But the Japan External Trade Organization (JETRO) warned it
may cut the projection if the impact of the Oct. 12 terrorist
attacks on Indonesia's Bali island continued to hurt Southeast
Asian economies, or the United States launched a military
campaign against Iraq.

"The 10 economies are to mark moderate growth of 5.8 percent
in 2003, unchanged from this year," said Mitsuru Toida, director-
general at JETRO's Institute of Developing Economies.

"Investment is expected to recover in the region next year
while exports are seen to be weaker than this year in some
countries, including China.

"But the forecast will need a revision if tension in the Gulf
increases or the aftermath of the terrorist attack in Bali is
prolonged."

The regional economic outlook covered China, Hong Kong,
Singapore, South Korea, Taiwan, Indonesia, Malaysia, the
Philippines, Thailand and Vietnam.

Indonesia's economy is seen inching up to 3.2 percent in 2003
from 3.0 percent this year.

"In 2003, Indonesia will see investment and exports bounce
back to a positive increase rate of 2.4 percent and 2.8 percent,
respectively," JETRO said in the report.

"However, private consumption and government consumption in
2003 will increase by slower rates."

Steady domestic demand would help China grow 7.6 percent, just
slightly lower than the 7.9 percent rate expected in 2002, the
institute said.

South Korea will see private spending slow, but nevertheless
should achieve sound economic expansion of 5.5 percent, compared
with 6.0 percent growth expected this year.

Private investment will recover in Taiwan and Singapore, with
these economies forecast to grow by 3.3 percent and 3.2 percent,
respectively.

In Hong Kong, both private investment and private consumption
will increase after easing this year, but economic activity will
remain slow at just 1.7 percent, compared with 1.2 percent in
2002.

Indonesia, Malaysia, the Philippines, Thailand and Vietnam
will expand by a combined 4.6 percent, up 0.5 percentage points
from 2002.

In Thailand and Malaysia, strong exports and investment will
support growth of 5.0 percent and 5.8 percent, respectively.
Thailand is seen to rise 4.6 percent this year, with Malaysia at
3.9 percent.

Growth in the Philippines is projected at 4.2 percent,
unchanged from 2002. In Vietnam, exports will continue trending
upwards to fuel continued strong growth of 7.0 percent next year.

In the outlook, JETRO also said the yen's exchange rate was
expected to be 120 against the dollar, while the East Asian
currencies are seen to remain stable. The combined inflation rate
for the region is expected to be around 1.6 percent, it said.