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.