Asia's economic growth is expected to remain flat in 2003 with the threat of a war in Iraq, a faltering US economy and deflationary concerns in the region posing major risks, the Asian Development Bank (ADB) said yesterday.
The Manila-based bank forecast that the region's economy would expand 5.6 per cent next year, the same as expected in 2002.
While China, South Korea, Viet Nam and India are expected to lead the region's growth, the export-driven Southeast Asian economies will only see a moderate improvement in their fortunes, ADB's chief economist Ifzal Ali told a media briefing.
"In all these economies, strengthened exports and an improvement in business will be important contributory factors in future growth," he said.
The ADB had forecast in September that the region would grow by 5 per cent in 2002 and by 5.7 per cent next year.
"Given the less optimistic baseline outlook for the world economy compared to September 2002, ADB projections of developing Asia's gross domestic product (GDP) growth for 2003 has been slightly revised downward to 5.6 percent from 5.7 percent," Ali said.
Some 41 developing economies in Asia were covered by the ADB study.
In East Asia, growth in the Chinese mainland and South Korea should fall back to 7.2 percent and 5.5 percent respectively in 2003, from 8 percent and 5.8 percent this year, due to weaker domestic and moderate export demand.
In China's Hong Kong Special Administrative Region, some improvements in the external environment, combined with a moderate revival in domestic expenditures will lead to a slight increase in growth in 2003, but at a projected 2.8 percent it will remain low by historical standards, the ADB said.
The bank predicted higher growth for Southeast Asia.
GDP is projected to expand by 4.3 percent in 2003 from this year's 3.9 percent in the Southeast Asian economies mainly because many of them are still in a recovery process, it said.
"Sustained domestic demand together with an better than average export performance in 2003 than in 2002 will help Indonesia, Malaysia, Singapore and Thailand grow somewhat faster in 2003," Ali said.
In South Asia, India, the only country in the region for which a projection is available, is expected to see its economic growth improve to 5.5-6 percent next year. In 2002, India's growth is expected to be 5 percent.
(China Daily December 13, 2002)