SC'00: DB analyst sees sustained 5% growth for Asian region

14 December 2000 03:04  [Source: ICIS news]

SINGAPORE (CNI)--Asia should see continued growth of around 5.0% as the economies in the region recover; however, markets remain "somewhat unsure on the precise impact" of the regional recovery on the chemicals industry, according to Huw Williams, Deutsche Bank's (DB) Hong Kong-based director of Asian chemical research Thursday.

Recovery will be backed by higher domestic demand, which will match rising exports, Williams said.

However, risks remain, with the possibility of a slowdown in Japan and an uncertain interest rate environment in the wake of the so-called "soft-landing" of the US economy, he said.

The US has already seen rate hikes, and "higher US rates will eventually impact the Asian environment, notably in those countries still pursuing fixed exchange rate policies," Williams said.

Williams identified some key issues as follows:

• China: Attention will focus on progress towards entry of the World Trade Organisation. A devaluation of the renminbi is not seen as a major concern.
• India: More reform and empowerment of the private sector.
• South Korea: High 1999 GDP growth rate of 10.7% unlikely to be repeated. Concerns remain over interest rates and the pace of chaebol reform.
• Philippines: 2000 growth may be as low as 3.5% and rising external debts cause concern.

Selected Growth Rates - the Outlook

Country	1999	2000 (expected)	2001 (forecast)
China	7.1	8.0	7.0
India	6.4	6.4	7.1
Indonesia	0.5	5.0	4.5
Malaysia	5.8	8.5	5.0
South Korea	10.7	9.2	5.0
Taiwan	5.7	5.0	4.0
Thailand	4.2	5.5	4.0

Source: Deutsche Bank

Williams was addressing delegates here at the 4^th World Styrene Conference (SC'00), an event organised by Asian Chemical News and ICIS-LOR, sister organisations of CNI. The event ends Thursday afternoon.

By: Stefan Baumgarten
+1 713 525 2653

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