U.S. soft landing to slow Asian growth in 2001: Poll

U.S. soft landing to slow Asian growth in 2001: Poll

SINGAPORE (Reuters): A recently rejuvenated Asia will see
growth slacken again next year, hit by a soft landing of the
United States economy, domestic political squabbles and a private
sector hobbled by debt.

Economists polled by Reuters around the region were unanimous
that 13 Asian economies surveyed, excluding Japan, will show
slower growth next year after a robust, export-driven expansion
in 2000.

The average of forecasts by leading research houses in Asia
for next year were lower for most economies compared with a
similar Reuters poll in September.

Economists said Asia's slower growth next year was linked to
the health of the U.S. economy just as its recovery was from the
debilitating financial crisis in 1997/98.

"The U.S. slowdown will affect everybody," said David Cohen,
director of macro forecasting at S&P/MMS in Singapore.

Stalled reform programs in many countries, an already fragile
foreign investment sentiment, a massively indebted corporate
sector and unhealthy banks completed the setting for a loss in
momentum, the economists said.

"Lingering worries about corporate and financial restructuring
will continue to pressure consumer sentiment and investment plans
going into next year," said Hwang In-sung, economist at Samsung
Economic Research about South Korea. Similar sentiments were
expressed about many other economies.

Growth will also be tempered by the strong showing this year.
The big base created by the sharp recovery will make it difficult
for the economies to surpass themselves, the economists said.

In 2000, the region rode big global demand for semiconductors,
computers, software and other electronic components to rack up
hefty growth figures.

In China, healthy exports, despite a slowing in the second
half, government investment and emerging domestic consumption
supported economic growth this year, they said.

"The picture this year has been very strong exports and
sluggish consumption," HSBC chief economist George Leung said of
Hong Kong.

"It'll change to one of very sluggish exports and slightly
improved consumption after the U.S. cuts rates by between 25 and
50 basis points in the first quarter of next year."

Most economists raised Hong Kong's current year forecasts
after the government announced better than expected real gross
domestic product (GDP) growth of 10.4 percent for the third
quarter -- the third consecutive quarter of double-digit growth.

Singapore's economy surprised on the upside in 2000, fueled by
buoyant exports of electronics to Asia and the United States, but
economists expect conditions to turn tougher in 2001.

Hong Kong's services sector would get a boost from China's
entry into the World Trade Organization.

Political uncertainties in the region and a soft landing in
the U.S. were downside risks for Singapore, the economists said.

China, Taiwan, South Korea, Malaysia and Thailand will also be
primarily affected by the slowdown in global trade.

"Slumping stocks will slow down private consumption now and in
2001, while domestic political uncertainties would trigger
caution in private investment," said First Global Investment
Trust economist Lin Kuo-yang about Taiwan.

Economists said even Thailand would be less affected by a U.S.
slowdown than some of its industrialized neighbors like South
Korea and Malaysia whose electronic industries are vulnerable to
an easing U.S. economy.

Indonesia is also dogged by the perception that it is either
too unstable or too difficult to do business with as support for
President Abdurrahman Wahid has waned and criticism has grown of
his running of the country.