IMF says export doubts cloud outlook for Asia

IMF says export doubts cloud outlook for Asia

Agence France-Presse, Washington

Asian economies are set for a grindingly slow recovery in 2002
and the outlook is clouded by uncertainty over demand for
exports, the IMF said in a report Tuesday.

Weak global growth in the wake of the Sept. 11 suicide attacks
on U.S. targets was hampering trade-dependent economies in Asia,
the IMF's revised World Economic Outlook report said.

The downturn initially was driven by slower U.S. and European
growth, recession in Japan and the slide in the global
electronics cycle, the International Monetary Fund said, updating
its semi-annual outlook to take into account the terror attacks.

"Particularly in a number of the newly industrialized
economies, these pressures now appear to have been stronger than
earlier thought and have generally intensified since September
11," it added.

The slowdown had spread to include domestic demand and
tourism, which was of particular importance to Hong Kong,
Singapore, Thailand and Pacific island nations, the IMF said.

Further risks could arise from weak financial sectors,
especially in Indonesia, Taiwan and Thailand, the IMF said.

This highlighted the importance of structural reforms to
strengthen financial and corporate sectors and sustain confidence
in the region, the IMF said.

Lower world interest rates and weaker oil prices would also
help most countries. Oil-exporting Indonesia, however, could face
tighter financing pressures, the IMF said.

Among newly industrialized Asian countries, South Korean gross
domestic product (GDP) growth was expected to step up to 3.2
percent in 2002 from 2.6 percent this year.

Taiwan, Hong Kong and Singapore would all emerge from
recession, the IMF forecast.

It expected Taiwan to grow 0.7 percent after a 2.2-percent
contraction this year, Hong Kong to expand 1.0 percent after
shrinking 0.3 percent and Singapore to climb 1.2 percent after
sliding 2.9 percent.

In developing East Asia, Indonesian growth was expected to
rise to 3.5 percent in 2002 from 3.2 percent this year, Malaysia
to leap to 2.5 percent from 0.3 percent, the Philippines to edge
up to 3.2 percent from 2.9 percent and Thailand to accelerate to
2.0 percent from 1.5 percent.

In South Asia, Indian GDP growth was set to accelerate to 5.2
percent in 2002 from 4.4 percent this year while Pakistani growth
would rise to 4.4 percent from 3.7 percent.

Chinese GDP growth was set to slow to 6.8 percent next year
from 7.3 percent.

Most countries across Asia had relaxed economic policies in
response to the worldwide slowdown, the IMF said.

On the fiscal side, Hong Kong, Malaysia and Singapore had
eased policy in recent months and South Korea had room for
further maneuver.

But high public debt or deficits in countries such as India,
Indonesia and the Philippines made it difficult for them to take
further fiscal action, the IMF said.