Asia's recovery going well, reports say
By Elaine Kurtenbach
Associated Press
HONG KONG — The increasing demand for Asian exports has helped the region rebound quickly from the global economic slump, although higher oil prices triggered by the Mideast crisis could derail that recovery, reports released yesterday said.
Associated Press
The World Bank and Asian Development Bank issued separate forecasts saying the region's economic rebound would be more gradual and sustainable than that seen after the Asian financial crisis of 1997-98.
The Petronas Twin Towers, the world's tallest buildings, provide a backdrop for this construction site in downtown Kuala Lumpur. Malaysia's industrial output turned around sharply in February, surprising economists.
Developing Asian countries will have average economic growth of 4.8 percent this year and 5.8 percent next year, helped by stronger demand for exports in the reviving U.S. and European markets and growing domestic consumption, the Manila-based ADB said.
The World Bank, based in Washington, said East and Southeast Asian economies, excluding Japan, will grow 4.7 percent this year and 5.6 percent next year.
Southeast Asian economies were benefiting from rising commodity prices, rallying stock markets and consumer spending, the World Bank said.
China remains one of Asia's best economic performers, though slower investment flows and weaker exports are expected to curb growth to 7 percent this year, down from 7.3 percent in 2001, ADB said.
But the bank expected the global economic recovery and the benefits of Beijing's new membership in the World Trade Organization to increase growth to 7.4 percent next year.
The semiannual reports were significantly more positive than last fall, when the outlook for the global economy was dimmed by the Sept. 11 attacks in the United States.
But they were compiled before Iraq on Monday cut off oil exports for 30 days or until Israel withdraws from Palestinian territories.
Iran and Libya also support an oil boycott, but are considered unlikely to follow Iraq's lead.
Some analysts expect other OPEC members to make up for an Iraqi shortfall.
ADB economists based their forecasts on the assumptions that interest rates and inflation would remain low and oil prices would stay in the publicly stated range of $22-$28 per barrel set by the Organization of the Petroleum Exporting Countries.
"Of course, the Middle East situation could be aggravated and could disrupt oil prices," ADB assistant chief economist Jean-Pierre A. Verbiest said. "If oil prices increase beyond the range, oil-importing countries will be seriously negatively affected."
Crude oil prices are near six-month highs.
This year, the Asian economies expected to show the most improvement are South Korea, Malaysia, Singapore and Taiwan, with the latter two rebounding from economic contractions last year, the ADB said.
Next year, Malaysia, South Korea and Vietnam will show the most improvement, the World Bank predicted.
