ST : East Asia recovering faster

Dec 15, 2009
East Asia recovering faster



China, buoyed by massive stimulus spending and easy credit, recorded by far the strongest recovery, growing 8.9 per cent in the third quarter. -- PHOTO: AFP

MANILA - EAST Asia's emerging economies are rebounding from the global recession faster than anticipated, the Asian Development Bank said on Tuesday, as it raised growth forecasts for the region.

The Manila-based lender said it expects growth of 4.2 per cent this year and 6.8 per cent in 2010. That's up from the bank's earlier forecasts of 3.6 per cent and 6.5 per cent. Emerging East Asia comprises 10 South-east Asian countries plus China, Hong Kong, South Korea and Taiwan.

The recovery has been aided by government stimulus spending and improving exports though the pace of the rebound varies widely, the ADB said. Less open economies in South-east Asia were partly insulated from the global crisis but are not expected to recover strongly either, it said. China, buoyed by massive stimulus spending and easy credit, recorded by far the strongest recovery, growing 8.9 per cent in the third quarter. The ADB maintained its growth forecast for China at 8.2 per cent this year and 8.9 per cent in 2010.

Middle-income South-east Asian economies - Indonesia, Malaysia, the Philippines, Thailand and Vietnam - expanded 1.2 per cent in the third quarter. The combined gross domestic product of newly industrialised nations Hong Kong, South Korea, Singapore and Taiwan contracted slightly by 0.1 per cent - a turnaround from the 6.3 per cent contraction in the first quarter of 2009.

'Emerging Asia is rebounding strongly and growth rates next year are likely to slightly outpace 2008 in most countries,' said the ADB's chief economist, Lee Jong Wha Lee, who cautioned that despite the recovery, it was essential that 'fiscal and monetary stimulus remain accommodative where possible to put economies on a sound footing'.

The bank said it expects 45 developing countries from central Asia to the Pacific to grow by 4.5 per cent this year and 6.6 per cent in 2010 - an increase from the 3.9 per cent and 6.4 per cent it forecast in September. -- AP