SE Asia heading for slowdown, says World Bank

SE Asia heading for slowdown, says World Bank

BANGKOK (DPA): Southeast Asia's export-based economies can
expect slowdowns across the board this year, as their markets in
the United States and Japan contract, the World Bank predicted on
Thursday.

The bank, in its latest half-year regional report on East Asia
made available in Bangkok, predicted gross domestic product (GDP)
growth rates would slow in all the more developed economies of
Southeast Asia, while emerging economies such as Cambodia, Laos
and Vietnam would match or exceed last year's performance.

According to the bank's estimates GDP in 2001 will grow 5.5
percent in Cambodia, 4.0 percent in Indonesia, 5.7 percent in
Laos, 5.0 in Malaysia, 3.5 in the Philippines, 5.2 in Singapore,
3.0 in Thailand and 5.5 in Vietnam.

The bank's gloomy regional outlook for 2001 follows similar
forecasts by the Asian Development Bank (ADB) and a spate of
downward revisions of GDP estimates by local governments this
week.

Singapore Prime Minister Goh Chok Tong returned home on
Thursday from a 10-day visit to Warsaw, Budapest and Prague with
a sober forecast of 5-per-cent growth for the city-state this
year, a big drop from last year's 9.9 per cent, .

Malaysia's economy, which expanded briskly in the past two
years, will moderate to 5- to 6-per-cent growth this year due to
the impact of the U.S. economic slowdown, the country's central
bank said Wednesday.

Malaysia's economy posted an annualized 8.5-per-cent growth in
gross domestic product (GDP) last year against 5.8-per-cent
growth in 1999, after turning around from 1998's severe 7.4-per-
cent contraction.

The sharper-than-expected slowdown in the United States, which
is Malaysia's single biggest trading partner and which last year
took in 18.7 per cent of Malaysia's annual exports, would hit the
manufacturing sector hardest.

"Of particular concern is the implication of the slowdown in
the United States on the electronics industry," said the Bank
Negara's governor, Zeti Akhtar Aziz.

Thailand will be similarly hard-hit by the anticipated decline
in exports to the U.S.

Thailand's National Economic and Social Development Board
(NESDB), the government's planning agency, last week revised its
own estimates for GDP growth in 2001 downwards to 3.5 to 4.0 per
cent, compared with its original target of 4.0 to 4.5 per cent.

Last year's economic growth was fueled primarily by exports,
which were up 20 per cent to reach 69.9 billion dollars, but with
the economies of the United States and Japan expected to slow
down in 2001, export prospects this year are not as bright.

The United States was Thailand's leading export market last
year, accounting for 21.3 per cent of its total exports.
Electronics was Thailand's leading export item, accounting for
nearly 26 per cent of the total, according to Commerce Ministry
figures.

The Philippine government has yet to revise its GDP growth
target for the year 2001, but President Gloria Macapagal Arroyo
has admitted that a slowdown in the United States and Japan would
trim the country's economic growth.

The U.S. and Japan are the country's top trading partners and
main markets for Philippine exports, especially electronics,
which are a key engine of economic growth.

Government economists said the country's GDP was expected to
grow between 3.8 per cent and 4.3 per cent this year, compared
with 3.9 per cent last year.

The Indonesian government will also need to revise its GDP
expectations downwards from its target of 4.5- to 5-per-cent
growth. Has the government revised its GDP for 2001?

"Lots of people are suggesting they should do it, but they've
got a lot of other problems. The rupiah's out of whack, subsidies
are bigger because they didn't raise fuel prices, and that
affects the budget," said one Western diplomat.