Regional survey finds Asia will ford U.S. slump
Regional survey finds Asia will ford U.S. slump
SINGAPORE (AFP): Asian countries should ride out the expected US economic slowdown this year, although Thailand and the Philippines remain susceptible to recession, according to a regional survey released Sunday.
The survey of economic analysts, government officials and businessmen in nine Asian cities asked how local economies would react to a US slowdown.
US economic growth this year is forecast to only rise about two percent, hitting the gross domestic product figures for Asia's tech-heavy. export-oriented economies.
But the Sunday Times poll found most respondents did not believe that the slowdown would lead to a recession and economies would pick up in the second half of the year.
"Our forecast assumption is that there will be a second-half pick-up," Eddie Lee, regional economist for Vickers Ballas Investment Research said in Singapore.
Taiwan's central bank governor Chen Shih-ment said US economic figures indicated the problem was more a fall in confidence.
"I would say it is just a hard-landing psychologically, but a soft-landing substantively."
In Malaysia, IFR Asia strategist Mokhtar Hassan said expectations that oil prices will stabilize "may keep inflation under control at two percent or below, while the inflow of foreign direct investment would likely increase to buffer the economy from a steep decline."
But eight out of 10 respondents in Thailand and the Philippines believed a slowdown in the US could tip their countries into recession.
"The economy is having for a difficult time. We thought we could rely on exports to solve our problems, now even that hope has been extinguished," said Akravech Chotinaruemol, dean of business at Bangkok's Rangsit University.
Akravech was not optimistic of major investment flows into Thailand because of low investor confidence in the country.
About one-third of the total Philippines outbound trade went to the United States, and 60 percent of the exports to the US were electronics products and semi-conductors.
"If indeed the IT sector will lead the slowdown, then this will have a significant impact on Philippine growth," said Buenvenuto Icamina, resident economist in the Philippine bureau of the Economist Intelligence Unit think tank.
In Indonesia, half the respondents to the survey said that how the local economy performed in the year ahead hinged on more domestic matters.
"A US economic slowdown can have more positives than negatives for Indonesia," said Vickers Ballas Indonesia president David Chang.
"A weaker US dollar would put less pressure on our economy, and allow cheaper servicing of our debts and cheaper costs for our manufacturers."
Eighty percent of respondents in China were confident the country would meet its projected 7-8 percent economic growth target.
"American companies have to be in China," said Wang Zhile of the Chinese Academy of International Trade and Economic Cooperation.
"They can't not care. If US businesses were to hold back because of the slowdown at home, their rivals would be here first."
Most people surveyed in Japan said the impact of a US slowdown on the Japanese economy would not be severe, but exports of cars, machinery and electrical goods could be affected.
Seventy percent of South Koreans said the impact on the local economy would be severe, but there would be no recession.