Asia’s economy to grow by 6.2% in 2000
MANILA, April 26 Kyodo
Asia is expected to maintain its position as the fastest growing region in the world in 2000, when its average economic growth is forecast to remain unchanged from the 1999 rate of 6.2%, an Asian Development Bank (ADB) publication released Wednesday said.
Strong domestic demand and favorable global economic conditions will propel continued growth for the region, which only two years ago was hobbled by the Asian financial crisis, the Asian Development Outlook 2000 said.
”Recovery in Asia was robust during 1999. The transformation of developing Asia from financial crisis in 1997 and 1998 to the world’s fastest-growing region has exceeded all expectations,” the Outlook said.
But it said slower growth in the newly industrialized economies (NIEs) of Hong Kong, China, South Korea, Singapore and Taiwan are expected to offset more rapid growth in Southeast Asia, South Asia, and the Central Asian republics.
The NIEs as a group are forecast to post an economic growth rate of 6.5% in 2000, slower than the 7.0% growth registered in 1999. This is primarily because of expected decline in economic growth in South Korea, where double-digit growth is not expected to be sustained, the Outlook said.
Southeast Asia, whose economy was hit badly by the financial crisis in 1998 when growth shrank 7.5%, made a dramatic turnaround in 1999, posting 3.2% growth. In 2000, the region’s economy is forecast to grow 4.6%.
The report said various positive factors, both domestic and external, contributed to the ”faster-than-expected recovery” of the crisis-hit countries of South Korea, Malaysia, the Philippines and Thailand.
These include increased consumption, stock rebuilding, massive fiscal stimulus, loose monetary policy, a surge in worldwide demand for electronics and new policy measures to address corporate and financial sector problems.
The Outlook warned, however, ”prospects for 2000 depend on the sustainability of domestic demand growth, not only through growth in consumption, but also an upturn in investment demand and favorable global economic conditions.”
The report sees Cambodia and Malaysia growing faster than their neighbors in 2000, when the two countries are expected to both post 6.0% growth, up from 5.0% and 5.4% in 1999, respectively.
Indonesia, whose economy grew 0.2% in 1999, is expected to leap to 4.0% growth in 2000. Laos is expected to grow at a rate of 4.5% from 4.0% in 1999, while the Philippines will edge up to 3.8% from 3.2% a year ago.
Thailand, where the financial crisis began, is likely to grow 4.5% from 4.1% in 1999, while Vietnam is expected to move up to 5.0% growth from the 4.4% rate it posted last year.
Among the NIEs, the Outlook said South Korea, whose economy blasted off to 10.7% growth in 1999 from a 6.7% shrinkage in 1998, will slow down to 7.5% growth in 2000.
It forecast Hong Kong’s economic growth will taper to 6.5% in 2000 from 7.0% in 1999 while Singapore is expected to post economic growth of 5.9% from 5.4% in 1999. Taiwan is seen to grow at 6.3% in 2000 from 5.7% in 1999.
Economic growth in China is expected to slow to 6.5% in 2000 from 7.1% in 1999, primarily due to slowed industrial and construction activity.
Mongolia is forecast to post 4.0% growth in 2000, up from 3.5% in 1999.
South Asia’s economy is forecast to expand by 6.4% in 2000 from 5.5% in 1999, with India likely to grow by 7.0% from 5.9% in 1999, the Outlook said.
The Central Asian Republics are expected to post economic growth rate of 3.0%, up from 2.8% in 1999.
The ADB is a multilateral bank based in Manila founded in 1966 to support development in Asia.
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