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Asia's economic star shines bright
Updated: 2003-12-30 07:03
MANILA: Despite experiencing multiple shocks in 2003, Asia has remained
resilient and continued to be a star performer in the global economy, with a
growth rate widely expected to reach nearly 6 per cent in the year.
The
growth is "remarkable" against the backdrop of severe shocks the region suffered
in the first half of 2003 with the Iraq War, volatile oil prices, slowdown in
the industrialized countries' growth, the SARS (severe acute respiratory
syndrome) epidemic and regional terrorist threats, according to Ifzal Ali, chief
economist of the Manila-based Asian Development Bank (ADB).
The outlook
for Asian economies was gloomy earlier this year, especially after the SARS
outbreak, which came at an already difficult time following the outbreak of the
Iraq War in March. The epidemic killed nearly 800 people in Asia and hammered
consumer spending, tourism and business confidence.
As a result, gross
domestic product (GDP) weakened considerably in the second quarter across much
of the region.
To cushion the impact of the shocks, many countries in the
region cut interest rates and unveiled pump-priming measures and aid packages to
stimulate domestic demand.
The prospects for the Asian economy brightened
in the second half of the year, thanks to the swift end to the major battle in
the Iraq War, which helped keep a lid on oil prices, and the quick containment
of SARS, which analysts estimated had cost East and Southeast Asian economies
about US$18 billion in GDP.
The region is also benefiting from the
improved outlook for its two biggest trading partners, the United States and
Japan, as well as robust trade within the region spurred by China's continued
rapid expansion.
In 2003, the most positive factor is the continuing
emergence of China as a driver of intra-regional trade and economic growth, a
trend underscored by the nation's overtaking the United States as the ROK's main
export market. For economies in East and Southeast Asia, the share of total
exports going to China has doubled since the start of 2000, ADB data
show.
"If this trend persists and developing Asia continues to focus on
policies to achieve faster growth in domestic demand, Asia's economic outlook
will, over time, become less vulnerable to economic swings in industrial
countries," Ali said.
In an update earlier this month to its September
forecasts for the region, the ADB projected China's economy growing by 8.5 per
cent in 2003 and cooling off to 8.0 per cent in 2004, as compared with the
respective 7.8 per cent and 7.9 per cent projected earlier.
On the back
of China's continued rapid growth, an improving external economic environment
facing Asia and strong domestic demand in many countries, the regional economy
is forecast to expand between 5.7 and 5.9 per cent in 2003 before accelerating
to between 6.2 and 6.3 per cent next year, according to the ADB, the World Bank
and the International Monetary Fund.
It would be the region's best
performance since the 7.1 per cent growth in 2000.
Many observers are
optimistic the region is heading for continued recovery and will remain a bright
spot on the world economic map.
(Xinhua)
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