11 February 1998 17:21 [Source: ICIS news]
LONDON (CNI)--Asia's crisis-hit economies are now in a period of stabilisation, chemical industry players meeting her heard Wednesday.
BP chief economist Peter Davies said: "There is every reason to believe that (Asia) can get back on the growth track within five years and maybe even within two years."
Davies, who was speaking at the Chem Systems annual European seminar, pointed out that all the equity markets in the region were now stable "back to where they were in January, or even above it." But1998 growth forecasts for the region were now six, seven or eight per cent below those forecast last year. South Korea, Thailand and Indonesia are all forecast to contract this year, growth will slow sharply in Malaysia and also in the Philippines, with even China only showing a growth rate of 5%, according to Davies' forecasts.
But he said: "I think that financial stabilisation has emerged."
Although he warned against overconfidence, he said: "The potential for catch-up and return to high growth is there."
Davies said the next stage would be one of economic adjustment and structural reform. "There will be liquidities - we will see companies closing, banks closing, economies falling back...as long as it is accompanies by structural reform that is great."
Globally, Davies predicted 1998 would be a year of reasonable growth but not quite as good as recent years.
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