Japan think tank revises down Asian growth outlook

Japan think tank revises down Asian growth outlook

TOKYO (Reuters): The Institute of Developing Economies (IDE),
a Japanese think tank, said yesterday it has revised down sharply
its growth forecast for the Asian region in calendar 1998.

"One of the main reasons for the revision is the prolonged
conflict between Indonesia and the IMF (International Monetary
Fund) over conditions attached to IMF lending," said Mitsuru
Toida, chief economist of Statistical Research Department of the
IDE.

The IDE is a semi-governmental think tank under the Ministry
of International Trade and Industry that specializes in the Asian
region.

"The other reason is that the severe credit contraction in
such countries as Indonesia, Thailand and Korea that are
recipients of IMF loans," Toida said.

The credit contraction prevailing in those countries is more
extensive and taking place over a longer period of time than the
IDE had forecast in December, he said.

Both domestic and foreign financial institutions are reluctant
to lend money to companies in Asian nations hit by currency
crises, aggravating the financial crisis and drying up liquidity
necessary for the real economy, he added.

The following is a breakdown of the IDE's revised forecasts
for 1998 in terms of real gross domestic product growth rates

Growth Forecast

Countries Revised Previous

------------------------------------

Thailand -3.0% +5.4%

Indonesia -5.5% +4.1%

Malaysia +4.0% +6.6%

Philippines +3.8% +4.8%

Vietnam +8.5% +8.5%

ASEAN five average -1.3% +5.2%

South Korea +0.4% +3.0%

Taiwan +6.3% +6.6%

Singapore +5.6% +7.3%

Hong Kong +2.6% +3.8%

NIEs average +2.9% +4.5%

China +8.4% +9.0%

Overall East Asia +3.9% +6.2%