East Asia's economy brightest in four years
East Asia's economy brightest in four years
Karl Malakunas, Agence France-Presse, Singapore
East Asia's economies will grow nearly twice as fast as the
world rate this year on the back of China's continued strength,
helping to lift millions of people above the poverty line, the
World Bank said on Tuesday.
The region's expected expansion of 6.3 percent in 2004 will be
the fastest since the global economic slowdown began in 2000, the
multilateral finance agency said in its twice-yearly East Asia
update.
"With the strong recovery in the United States and Japan,
increased demand for East Asian exports and the long-awaited
rebound in the hi-tech sector, the outlook is very positive for
the big countries and for the smaller ones," World Bank regional
vice president Jemal-ud-din Kassum said.
East Asia's expected growth rate compares with a forecast of
3.7 percent globally and 4.6 percent for the United States.
China, which now accounts for about half the export growth in
most East Asian economies, is again expected to remain the
driving force of the region's expansion with a 7.7 percent rise
in gross domestic product this year.
The World Bank warned, however, there were risks for the
region if Beijing's efforts to slow the nation's booming economy
-- it grew by 9.1 percent in 2003 -- resulted in a "hard
landing".
"The Chinese authorities are aiming to eliminate overheating
by slowing growth to a more sustainable pace of around 7.0
percent, but their task is complicated by the limited range and
bluntness of macroeconomic policy instruments available," the
bank said in its report.
"A key risk at the regional level is that attempts to slow
China's economy could overshoot... with obvious implications for
regional trade and growth."
Nevertheless, the World Bank was optimistic slower growth
would be manageable in China and this would have only a modest
impact on other economies in the region.
"We believe that China will be able to achieve a soft
landing," the report's lead author, Milan Brahmbhatt, told
reporters via video-conference.
Thailand, with a forecast growth rate of 7.2 percent, and
Vietnam, at 7.0 percent, are expected to have the next fastest
growing economies in East Asia.
The World Bank also emphasized the region's low and middle-
income countries should expand at 7.6 percent, their fastest rate
since the 1997-1998 Asian financial crisis.
Rising commodity prices, partly fulled by China's insatiable
appetite for raw goods, have been a big factor in helping the
smaller economies, it said.
Prices for commodities such as cotton, rice, rubber and edible
palm oils rose by between 10 and 20 percent in 2003 and have
continued to surge in the first few months of this year,
according to the World Bank.
This partly contributed to the incomes of 49 million people in
East Asia rising above the poverty line benchmark of two U.S.
dollars a day during 2003.
About 674 million people in the region, about 36.7 percent of
the population, are now believed to be living on less than two
dollars a day, down from 66 percent in 1990.
Of the 674 million people living below the poverty line, about
190 million live on less than one dollar a day, the World Bank
said.
The World Bank also highlighted the strong performances of
East Asia's newly industrialized economies, Hong Kong, Singapore
and Taiwan, saying their strong recovery from the Severe Acute
Respiratory Syndrome (SARS) crisis in the first half of last
year would continue through 2004.
It said the newly industrialized economies would have a
combined average growth rate of 5.5 percent, up from 3.0 percent
last year.