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.